Condominium prices dropped 1.2 per cent year-over-year in the capital in the fourth quarter of 2013, according to a survey by real estate firm Royal LePage, providing further evidence of a slowdown in demand for the units in Ottawa.
An artist's rendition of Claridge's proposed condo tower at 505 Preston St.
The drop in average condo prices – which fell to $260,500 – was largely the result of the influx of new condominium offerings coming onto the market, the report’s authors said.
"We have a small supply overflow in the Ottawa condo market with an approximate 20 per cent increase in inventory this year, but there is sufficient demand for these new units,” said John Rogan, a broker/manager with Royal LePage, in a statement.
“We expect they will work their way through the system in 2014."
The greater choice potential condo buyers have at their disposal has left local developers anticipating fewer new projects in 2014.
The prices for detached homes, meanwhile, continued to increase. That category grew 2.2 per cent to $397,667 during the quarter.
Royal LePage believes average prices will go up by 1.6 per cent in 2014.
Nationally, the Royal LePage housing survey shows average price of a home in Canada increased between 1.2 per cent and 3.8 per cent in the fourth quarter of 2013.
It says the average cost of a standard two-storey home rose 3.6 per cent year-over-year to $418,282, while detached bungalows went up 3.8 per cent to $380,710.
Royal LePage says the price of a standard condominium rose 1.2 per cent during the quarter to an average of $246,530.
The real estate company says prices are expected to maintain a “healthy momentum” this year and rise a projected 3.7 per cent over 2013.
CEO Phil Soper says late 2013 saw the housing market transition to “buoyant sales volumes” and above-average growth.
He says that in the absence of “some calamitous event or material increase in mortgage financing costs,” he expects positive momentum to characterize 2014.
“We predict continued upward pressure on home prices as we move towards the all-important spring market.” he said.
“Talk of a 'soft landing' for Canada's real estate market in the new year is misguided,” continued Mr. Soper.
“We expect no landing, no slowdown, and no correction in the near-term. Conditions are ripe for as strong a market as we saw in the post-recessionary rebound of the last decade.”
–With files from The Canadian Press.