Ottawa’s robust economy helped dramatically cut the number of unsold housing units in the region over the first three quarters of 2017, the Canada Mortgage and Housing Corp. said in a report released this week.
The number of completed and unsold units in the city stood at 367 in September, down from a peak of about 650 in June 2016, said CMHC senior market analyst Anne-Marie Shaker.
She attributed the drop to a steady rise in the overall number of residents with full-time jobs, healthy public-sector employment and a rise in average earnings. Statistics Canada said the number of employed residents in Ottawa-Gatineau rose to nearly 725,000 in December, while the region’s unemployment rate dipped to 5.5 per cent, its lowest level since last April.
“The economy has been strong,” Shaker said. “All this has supported the housing market.”
Builders cut the number of condo starts in 2015 and 2016 in response to a glut in the market, CMHC said in its quarterly housing market assessment, allowing the market to absorb much of the unsold inventory last year.
Condo sales jumped 29 per cent last year over 2016, from 1,504 to 1,940.
“Due to the persistence of the decline (in unsold inventory), the evidence of overbuilding in Q3-2017 switched to low from moderate,” the agency said.
Overall, 17,309 housing units were sold in Ottawa in 2017, up from 15,116 the year before, according to the Ottawa Real Estate Board. CMHC is forecasting total sales of between 16,300 and 17,700 for this year but expects overall sales to rise in 2019 thanks to ongoing construction projects such as light rail and continued strength in the IT sector, Shaker said.
She also noted that builders began to put more focus on rental apartment units. Last year, 1,501 rental apartments were constructed in Ottawa, compared with 1,431 condos.
“The market adjusted itself to demand,” Shaker said.