Ottawa townhouses: tightest inventory, weakest prices

The number that doesn't fit

OREB's July release landed Thursday and the word in the headline was steady. Sales were 1,325, up 0.2% from July 2025. New listings eased. Absorption improved. All fine.

Then you get to the property type breakdown and there's a line that should stop you.

Townhouses recorded 3.0 months of inventory in July. Single-family homes recorded 3.2.

Detached had been the tighter segment as recently as June, at 2.8 months against 3.2 for townhouses. In July the two lines crossed. Detached loosened, townhouses tightened.

Now the other number. The townhouse benchmark price is down 5.1% year over year. Single-family is up 0.6%.

So the segment carrying the least inventory in Ottawa is the segment losing the most value, and it's the only one where the decline is getting worse rather than better. In June the townhouse benchmark was down 3.9%. A month later it's down 5.1%. Apartments moved the opposite way over the same month, from down 6.0% to down 5.2%.

If months of inventory told you what most people think it tells you, that combination could not exist.

Months of inventory moves for two reasons and people only watch one

Months of inventory is active listings divided by the current monthly sales pace. It can fall for two completely different reasons. Buyers can show up, or sellers can leave.

Townhouse sales in July were 417, down 4.1% from a year ago. Buyers did not show up.

Here's what did happen. Citywide active listings fell 6.1% from June to 4,678. New listings came in at 2,530, down 0.8% year over year, the second time in three months that new supply ran below the year before. For townhouses specifically the sales-to-new-listings ratio improved to 55.9%, which reads like demand but is mostly the denominator shrinking.

Remember where townhouse inventory sat in June. Active townhouse listings were up 27.6% year over year. That overhang did not get absorbed in four weeks by a segment doing 4% fewer deals. It got withdrawn.

That's the whole story. A months-of-inventory figure that improves because listings came off the market is not a tightening market. It's a queue forming where the statistics can't see it.

Where that inventory went, and when it comes back

September. I wrote a few days ago that the fall market arrives as inventory rather than buyers, and the July segment data is the setup for exactly that. Every townhouse pulled in June and July is a listing decision deferred, not abandoned. Those owners still want to move.

Meanwhile the price signal keeps telling the truth. The MLS Home Price Index exists to strip out changes in what sold, which is why it's the number in the release actually worth arguing with. It says a constant-quality Ottawa townhouse is worth 5.1% less than last August, and the gap has widened two months running.

What this does to a move-up seller

This is the part that matters if you own one.

Detached benchmark up 0.6%. Townhouse benchmark down 5.1%. Run those against each other and a detached home now costs roughly 6% more relative to a townhouse than it did a year ago.

If you own a townhouse and you're planning to step up to detached, you are losing on both ends of the trade. Your proceeds are down and the thing you want got more expensive in the only currency that counts, which is what your equity buys. That spread has widened all year and there's nothing in the supply data that reverses it soon. Of the 15,646 units under construction in Ottawa, only 907 are detached. Rows account for 1,332. Apartments account for 13,202.

Detached scarcity here is structural. Townhouse softness is not going to be solved by a builder.

The rest of the release, quickly

Average price came in at $683,308, down 1.6%. Median was $635,000, unchanged from last July. The composite benchmark was $634,000, down 0.5% year over year but up 0.3% from June.

Median days on market went from 24 to 28. Apartments sat at 41.

Homes sold at an average of 97.8% of list price, against 98.0% a year ago. That's your pricing discipline number. Push more than a couple of points past what the comps support and you're negotiating down from your own ask, not up from a buyer's.

Year to date there have been 8,288 sales, down 5.2%. That's better than the 6.1% gap at the end of June, which is a real improvement, but it's still a down year on roughly $5.8 billion in volume.

Suburbs did more than 70% of the volume. Ottawa Centre ran a 39.6% sales-to-new-listings ratio and 5.6 months of inventory. Downtown condo remains the softest thing in this city and has been for a year.

The Bank of Canada held at 2.25% on July 15. Next decision is September 2.

One more piece of context on the headline. Sales fell 12.7% from June, where the median June-to-July drop over the past decade is 20.7%. That got read as strength. It's better than usual, and it's still a decline off a year that's running 5.2% behind. A shallower seasonal dip is not a recovery.

What I'd do with this

If you own a townhouse and you pulled your listing this summer, don't assume you're going back into a better market. You're going back in alongside everybody else who did the same thing. Relisting in the last week of August, ahead of the wave, is worth more than a fresh photo package.

If you're buying a townhouse, this is the one segment where the data is on your side. Tight inventory on paper, a falling benchmark underneath it, and a seller pool that has been waiting since spring. Ask for the full listing history on anything you're serious about, including previous asks and any terminated listings, before you write.

If you're a detached seller in the west or south suburbs, you're in the strongest position in the city. Suburb West ran 56.2% absorption at 3.0 months. Suburb South did 8.0% more sales on 6.6% fewer new listings. That's the genuinely firm corner of this market. Don't waste it testing a number the comps won't carry, because 97.8% sale-to-list says the market corrects you on the way down.

You can see what's on the market right now here.

If you want the read on your specific segment rather than the citywide average, that's a phone call, not a report. Townhouse owners in particular should know what the last four sales in their own complex actually did, because the citywide benchmark is not your complex. Call or text me at 613-262-6545, or email fil@613realtor.ca.