As they have done all year, the December 2023 new-home sales numbers for Ottawa ended on a low.
There were 140 sales for the month, according to the latest report prepared by industry analyst PMA Brethour Realty on behalf of the Greater Ottawa Home Builders’ Association. While that’s up a whopping 125 per cent over the 62 new homes sold the December before, 2022 was an exceptionally poor year for sales. A better barometer is the five-year average for December — and this past year saw 42 per cent fewer sales than the average of 242.
“December brought an end to a challenging year for the Ottawa new-home market,” says Cheryl Rice, who is PMA’s Ottawa president. “Interest rate increases by the Bank of Canada throughout 2022 and 2023, combined with high inflation and mortgage rates, and the ongoing housing shortage, took their toll on a market struggling to ride a correction.”
For the year as a whole, there were 2,569 new-home sales, compared to 2,776 the year before. That’s a 7.5 per cent drop, but 2022 was helped by a strong start to the year, before the market collapsed. Starting in April, 2023 outperformed 2022 every month, although sales still remained well below the five-year average.
The Bank of Canada’s “final blast at 50 basis points last summer tanked what had started as a modest spring recovery, with only one month — October — giving the market a brief lift,” Rice says.
She attributes that lift to the release by Minto Communities of entry-level stacked condo towns, which resulted in lineups on release day of buyers looking to secure lots — a move we haven’t seen in at least a couple years.
Still, she notes, “those sales were not enough to shift the annual sales trajectory already underway.”
Townhomes remained the most popular housing type for the year, capturing 53 per cent of the market, but condo towns saw significant gains, jumping to 17 per cent of sales compared to just two per cent the year before.
And, as it has for some time, the south end of the city grabbed the biggest market share at 51 per cent.
As for the coming year, “We expect the market is going to be a bit bumpy and unpredictable for the first half of 2024,” Rice says, “with conditions and sales improving in the second half of the year, once interest rate cuts work their way through to the consumer.”
