Ontario Construction News staff writer
In the post-COVID era, Ottawa’s new housing market has seen some dramatic shifts, notably in the volume and type of housing inventory available.
In a recent interview posted on YouTube, Greater Ottawa Home Builders’ Association (GOHBA) president Jason Burggraaf interviewed Cheryl Rice, president of PMA Brethour Ottawa.
Below is an edited transcript of the interview, posted on Aug. 22.
Jason Burggraaf: This year has been quite interesting, I mean every year is, but this year has been particular so we thought let’s do a kind of a midyear check-in so for people who aren’t familiar with the process. Can you explain how you get the new home sales stats?
Cheryl Rice: We have a team of researchers. We either physically go out to the sites to collect the market data from these sales offices or for a lot of them we collect it electronically. We reach out to them at the very early stages of each month and request their sales data. We collect their site plans. We collect their floor plans. So we’re collecting all of the information related to a particular site.
We have as our clients and in our database I would say the vast majority of builders and developers in the city for sure.
Jason: The chart we have for this segment about overall activity in the new housing market is called what you call ‘released inventory’. Could you give us an idea of what is that number?
Cheryl: The level of inventory is the number of homes that are available on the market that are available to sell now. Some may be finished (and) ready to go, ready to occupy and others will be under construction. It’s what a builder is holding in inventory available as product for sale
Jason: Does it include lots that are ready to be built on?
Cheryl: Yes it would if they are slated and they’ve got their permits and they’re ready to go on for sale that would be considered even if they’re they’re waiting for a buyer.
Jason: Looking at March to April (on the chart), in April it’s 2,849 and in March 2,495, so is the chart saying there were six more units available for sale?
What I think is most interesting about this chart and it kind of blew me away is that there’s a perception out there that there’s such little supply available compared to previous years, when in fact what I see in this data is actually that there’s a lot of opportunity to buy out there. It’s the price and everything else . . . the bigger the better issue and again the affordability factor.
Cheryl: What we’ve seen is overall (is) we’ve experienced a reduction in demand that has allowed our inventories to start replenishing a bit.
Remember the days when we had micro releases so builders during the height the market would release you know just a few (homes), a dozen, or maybe even a few less, sometimes just four (in years 2020, 2021, and 2022).
They were pacing their sales because they didn’t want to necessarily release more product than they felt that they could sell.
Jason: I recall at least at the time it was it was also a lot of labour balance (challenges). We still had COVID restrictions on how many people you could have on site, so construction timelines were dragging out (and) you really had to kind of program how much capacity you had. You only had a limited amount of capacity to be able to build in the first place.
Cheryl: Gone are those days of the weekend burst of sales, the micro release strategy as we used to call it. Now we’re seeing larger releases which, are as you know, more common than from before the market heated up. So that has normalized significantly.
But if we’re looking at the data on the monthly inventory, you know we had seen that it was decreasing by 22% year-over-year since January 2019, so that was even before COVID, and it wasn’t until February 2023 that our market started to see some significant double-digit growth in inventory. I think we were averaging about 53% gains over previous years. That’s pretty significant, peaking in September 2023 to 70%.
In 2024 we continue to average about 49% year-over-year growth in inventory, so so you know this. It’s a good thing to have the inventory there for the consumer because it gives them more choice …
The landscape in our market product has also changed. We know that at one point our inventory was predominantly condo apartments. You had the big towers or even the mid rise product and that had a peak share of 62% in 2021 as an example of available inventory. That percentage is now 10% as several builders have moved into the purpose-built rental market.