I’m sure I don’t have to tell you how much living expenses have gone up in every area: gas, groceries, housing costs, etc.

People are beginning to spend more cautiously. And, as people across the Ottawa area consider the best use of their funds, we are seeing a drop in real estate market activity.

Sales for July of this year numbered 1,110, a 35% decrease compared to 2021.

Selective spending

If you’ve followed the local market trends for some time now, you’ll know that Ottawa’s average resale prices for homes have continued to climb gradually, even when activity seems to decrease. Last month, the average sale price for residential properties saw a 5% year-over-year increase (to $716,354). With recent hikes in interest rates, it is fair to assume that many buyers have stepped away from the real estate market this summer to reevaluate the costs.

For many, these higher costs could be an obstacle to buying a new home – especially when it comes to passing the federally mandated stress test.

Another likely contributing factor to market slowdowns is the increase in numerous other expenses. Individuals and families may be cautious to make large purchases when they also have to pay increasing prices on basic necessities.

After several summers of lockdowns and travel restrictions, more people may be putting their money towards vacations as well.

Better balanced

The good news for buyers who are considering getting into the market is this: for the first time in years, Ottawa is on its way to a balanced real estate market.

Residential-class inventory levels have reached 2.9 months of stock. A true balanced market requires 4 months of stock, but this is a good start.

The average number of days on market has increased, meaning that buyers not only have more options to choose from, but also more time to make decisions.