To no one’s surprise, Ottawa’s 2022 resale market ended up performing far below 2021, according to the Ottawa Real Estate Board. The annual results were echoed in December numbers, which were also dismal compared to the previous year.
While rising interest rates, inflation and buyer fatigue battered the resale market, inventory levels have grown healthier, and the market has finally returned to a balanced state after a long run that favoured sellers over buyers.
A strong start that quickly fizzled
Following a record-setting 2021, last year opened positively, including a 52-per-cent jump in sales transactions in February compared to January. And that was it for the year. March saw a 12-per-cent decline in sales compared to 2021, kicking off an unending string of low numbers that, in November, saw 42 per cent fewer transactions than the previous year.
December was another dark month, with just 601 transactions compared to 857 in the same month in 2021.
“Even with the normal seasonal slowdown, December’s performance was in stark contrast to the very active resale market that opened 2022,” says Ken Dekker, OREB’s newly installed president, in a statement. “As interest rates and inflation both climbed, buyers retreated to the sidelines and began taking a wait-and-see approach.”
By the time the year wrapped up, Realtors with the board had sold 15,288 properties, compared with 20,289 in 2021, a 25-per-cent decline. Of the transactions last year, 11,508 were non-condominium properties and 3,780 were condominiums.
Total sales volume in 2022 was about $10.5 billion, compared to $13 billion in frantic 2021.
The situation was analogous in Toronto, where total sales in 2022 fell 38.2 per cent compared to 2021, and Vancouver, where sales fell 34 per cent last year compared to the previous year. Some other Canadian cities, including London, Ont. and Halifax, saw sales declines as well.
Prices moderated and inventory grew
In December, non-condominium properties sold for an average $655,839 and condos fetched $434,973.
For all of 2022, the average price for non-condominium properties was $769,623. Condominiums averaged $453,770. Those prices were up seven and eight per cent respectively over 2021, but those numbers were far lower than the 24-per-cent growth for non-condos and 16 per cent for condos seen in record-setting 2021.
December also saw 669 new listings, beating out the five-year average of 662. Months of inventory for all properties averaged 3.8 months, a major improvement after years of low resale stock and a clear signal that the resale market has finally returned to a balanced state.
Looking ahead to 2023, Dekker said, “Since Ottawa is made up of hyper-local markets, it is a difficult ecosystem to forecast … Plus, there are a multitude of factors influencing a changing economic environment these days that will dictate how much activity the resale market will see in 2023.”
