The Ottawa Real Estate Board (OREB) says home prices in the capital ticked up slightly in May, but overall sales levels were down, likely as people awaited the Bank of Canada’s interest rate announcement in June.
The average price of a home sold in May 2024 was $690,683, up 0.8 per cent from last year.
The benchmark price for single-family homes in Ottawa last month was $736,000, up 1.1 per cent compared to May 2023. Townhouse prices were up 2.1 per cent to $517,500, and apartments rose 2 per cent to $425,000.
Home sales were down 9.2 per cent compared to May 2023, with 1,545 units sold. The number of new listings, however, saw an increase of 26.2 per cent from May 2023. There were 3,034 new residential listings in May 2024.
“The increase in new listings indicate that sellers are more confident that properties are moving as more activity returns to the market. Some sellers, however, were likely waiting for the Bank of Canada’s interest rate announcement to see if it would affect their purchasing power,” said OREB president Curtis Fillier in a news release. “The first interest rate cut in four years is good news, but expectations still need to be managed as long as supply issues and high home prices persist.”
The Bank of Canada cut its overnight rate by 25 basis points this week to 4.75 per cent from 5 per cent. It’s a move that many had been expecting for several months, as Canada’s inflation rate has remained under three per cent since January.
Fillier said, however, that lower interest rates won’t accelerate the building of new homes and criticized the City of Ottawa for a recent hike in development fees.
“Interest rate cuts, for example, can’t help get more homes built and make them affordable when the City of Ottawa is hiking development fees — a counterproductive move that OREB is firmly against,” Fillier said.
Last month, council voted to increase fees on new home construction by 11 per cent. The fees are one-time costs levied on new residential and non-residential properties to help pay for infrastructure, including roads, water and sewer mains, transit, and parks. Staff had originally recommended a 28 per cent increase, but council agreed on a lower hike.
Overall, home sales are up 5.2 per cent in the first five months of 2024 compared to 2023. OREB says 5,673 units were sold in Ottawa as of the end of May.