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  • Writer's pictureThomas Desjardins

August 2022 Ottawa Real Estate Market Update



The Ottawa Real Estate Market in Context

As supply and demand have begun to shift, the question on many people's minds is: Where is the market headed?


Let's take a look at some core indicators, within the context of market trends.


Number of Home Sales (Year-Over-Year)

* Residential sales includes all residential properties; freehold includes detached singles, townhouses and semi-detached homes; and condos include apartments, row units and stacked-style dwellings.


Generally, home sales have been slower in 2022 than 2021, as seen in the data above, which shows the year-over-year change between August 2021 and August 2022. However, the cause of this slow-down has shifted over the year. In Q1, sales activity was predominantly impacted by low supply, meaning fewer homes were available for sale. In contrast, there was less demand through the summer, meaning fewer active buyers in the market. Less demand in the summer led to a pronounced and ongoing slow-down in sales activity on a year-over-year basis.


Overall Prices (Year-Over-Year)

* Residential sales includes all residential properties; freehold includes detached singles, townhouses and semi-detached homes; and condos include apartments, row units and stacked-style dwellings.


Despite the rapid decline in demand this year, the figures above show that house prices nonetheless remained slightly higher through August 2022 than they did in August 2021. That said, this statistic can be misleading without examining market performance on a month-over-month basis. The table below shows month-over-month data for 2022 to-date. The decreases in pricing align predictably with the increases in interest rate that began to take effect in March. A schedule of the overnight rate increases affected by the Bank of Canada can be found here.

Month (2022)

Price

% Change

January

$680,276

10.92%

February

$750,496

10.32%

March

$758,969

1.13%

April

$739,583

-2.55%

May

$718,998

-2.78%

June

$686,752

-4.48%

July

$649,602

-5.41%

August

$635,982

-2.10%

Days on Market (Month-Over-Month)

The term "days on market" refers to the number of days that a home is listed for sale before it is purchased.


In August 2022, a home took 26 days to sell, on average. This August 2022 figure represents an increase from March and April 2022, when homes sold in 10.5 days. However, looking year-over-year, the 26-day average in August 2022 is compared to a more moderate 19-day average in August 2021.


Months of Inventory


The months of inventory measure ("MOI") is a core indicator of whether we are in a buyer’s, seller’s, or balanced market. MOI is calculated by taking the amount of homes available for sale and assessing how long it would take for those to sell if demand remained constant and no new inventory was added to the market. A balanced market has between 4 to 6 months of inventory, a seller’s market has less than 4 months of inventory, and a buyer's market has greater than 6 months of inventory.


In August 2022, roughly 3 months of inventory was available on the market. This amount represents a significant increase over August 2021, when we had around one month of inventory available.


This shift in MOI suggests that we are headed toward a balanced market, though we remain in a seller’s market for the time being.


Historical Average Home Prices in Ottawa (1956-2021)

A review of historical sales data for the last 60+ years helps illuminate the present situation in Ottawa's housing market. Cumulative record-setting years of appreciation have resulted in a rapid escalation in house prices, so the current correction is not unexpected, independent of interest rate increases.



What This Means for You

It is critical to note that broad aggregate data is useful to establish trends, but significant variability exists at a community and housing-type level. If you are interested in getting a more refined estimate of the value of your home, or if you are interested in beginning your house hunt, please feel free to get in touch.


* Real estate market data is taken from the Ottawa Real Estate Board's Multiple Listing Service (MLS) and is believed to be accurate but it not warranted.



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