Taking more time to consider whether now is the right time to move? You’re not the only one.

Market activity on the Ottawa Real Estate Board indicates that more buyers are taking a step back to evaluate budgets and strategies as interest rates rise.

A total of 1,080 transactions were completed last month. That’s 33% fewer than the year before. And yet, the number of new listings hitting the market has gone up (2,371 in the month of September).

Holding out hope

Some buyer hesitancy is certainly based on continued rate hikes by the Bank of Canada. Long-term costs have become more of a consideration for those looking to buy at this time, and the instability of variable rate mortgages has some buyers stepping back.

Others, it seems, are waiting in hopes that housing prices will take a hit with these new market conditions.

Unfortunately, at present, the average price trends are still increasing slowly over time. The average sale price for residential-class properties in September was $706,658, which is 0.5% higher than September 2021. Condominium-class properties, on the other hand, went up 6% to $450,987.

Then again, prices have been on a slow decline since April, so some buyers may be hoping that the new, more balanced market conditions and lack of competition will cause this trend to continue.

Stress test struggles

For some potential buyers, their only hope of finding a home right now is if prices continue to drop.

Mortgage stress tests have become a barrier to homeownership (once again thanks to the rising interest rates). Purchasing a starter home, or even upsizing to accommodate a growing family, is now out of the question for some people.

Perhaps that has something to do with the increasingly large number of rental deals being made through the Ottawa Real Estate Board. So far in 2022, 4,678 properties have been rented through Realtors®, compared to just 3,598 by this time last year. For many hopeful buyers, renting might currently be the only affordable option. (And, even then, we’ve seen rent prices go up quite a bit in this area over the last year or so).

The benefit for buyers

Luckily, for buyers, the slow-down in activity is making it more possible to carefully consider options. Current market inventory is now at 3.1 months for residential-class properties and 2.7 months for condominiums. With more listings to choose from and less competition to worry about, buyers can make deliberate and informed decisions instead of feeling pressured.