Context is key when looking at housing sales numbers and Ottawa’s September 2023 new-home sales are no exception.
On the surface, it appears to have been a good month, according to the monthly report prepared by industry analyst PMA Brethour Realty on behalf of the Greater Ottawa Home Builders’ Association. There were 208 new-home sales in September, which is up an astonishing 136 per cent over September 2022, when there were just 88 sales.
But the latter part of 2022 was an exceptionally poor sales period, when escalating prices and interest rates, along with rising inflation and a lacklustre economy, took the steam right out of Ottawa’s very hot real estate market.
Even comparing this September to the five-year average still gives a skewed picture, as the last couple of years have been quite low while 2019 and 2020 were unusually high.
“It’s true, the last five years have seen significant fluctuations,” said PMA Ottawa president Cheryl Rice, before providing a 10-year average instead:
When spread out over 10 years, the less-than-stellar showing of this September is clearer, falling almost 50 per cent short of the average of 407 new-home sales.
And compared to another regular measure — sales for the year to date — 2023 is underperforming, seeing a 25 per cent decline this year from the same period last year (1,928 this year versus 2,560 last year). Last year, it’s worth noting, saw higher than average sales to start the year before the market collapsed into record low sales.
However, despite continued poor performance, change is underway that may signal a shift in the market as several builders began launching new developments in a flurry of activity not seen for more than a year.
“The 2023 market is rebounding as price corrections and existing and new inventory fuel sales,” says Rice. “New openings and fresh stock of product are being brought to market and sold at prices that are proving there is demand — for product that is priced right.”
Builders are being strategic in pricing strategies and their value proposition, she says. “Some are offering affordability while still maintaining high specifications, while others are offering entry-level product at prices that have buyers literally lining up for a chance at buying a new home, including new buyers and investors from Toronto, a group that had thinned out in 2021 when new townhome prices went through the roof.”
Minto Communities in particular has seen great success at multiple launches in the past few months, including at Parkside at Arcadia in Kanata, where the builder introduced entry-level stacked towns under $400,000 and at Abbott’s Run in Stittsville, where it introduced townhomes with up to six bedrooms and three-storey singles — both aimed at offering buyers flexibility at their level of affordability.
For the rest of the year, Rice expects “October sales to be quite good, spilling over into November and outperforming last year’s numbers. December will experience the usual slowdown but is expected to likewise outperform 2022.”
