Sales of luxury homes in Ottawa have increased so far this year, report says

September 19, 2024

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Ottawa’s entrepreneurs, tech workers and senior federal officials continue to drive sales of luxury homes in the city, according to the 2024 Royal LePage Carriage Trade Luxury Market Report released today. According to the report, in the first eight months of 2024, the median price of a luxury property in the city of Ottawa increased two per cent year over year to $2,442,500. During the same period, sales activity increased 13 per cent. The entry-level price of a luxury property in Ottawa is $2 million. “As a result of the foreign buyer ban, purchasing a home in Ottawa has been tricky for international clients. However, luxury homes continue to receive interest from the city's robust roster of entrepreneurs, tech workers and top-level federal employees and officials," said Charles Sezlik, sales representative, Royal LePage Team Realty. In January 2023, the federal government implemented a two-year restriction on the purchase of residential real estate by non-Canadians in an effort to free up much-needed supply for local buyers. Sezlik added, "Of particular interest is Ottawa's series of modern, block-style homes. Builders are continuing to churn out new supply, despite the increased cost of materials and labour." The report suggested that, in some regions of the country, the high cost of construction is driving demand in the resale segment, with buyers seeking renovated, turn-key properties. "Luxury buyers typically have the means to be picky … Often, their decision whether to buy or not is driven by their confidence in the health of the overall economy and the direction they see housing prices headed. Our research shows those in the higher end of the housing market have a very positive outlook on the long-term stability and appreciation potential of Canada's housing stock," said Phil Soper, president and chief executive officer, Royal LePage. Soper added that movements in interest rates typically do not impact luxury sales. "Many buyers in the luxury market segment do not require high-leverage mortgages, where the amount borrowed relative to the value of the underlying property is large. In fact, it is common to see expensive homes purchased with very substantial down payments, or even fully in cash. Thus, luxury homebuyers as a rule are not as heavily impacted by high interest rates as the average consumer,” he said. In Ottawa, Sezlik said that while last year was sluggish for the luxury market as clients took a wait-and-see approach, the market turned a corner this past March, resulting in a strong spring. "Supply has been on the rise thanks to the completion of more luxury builds, in addition to a renewed sense of confidence among sellers. Similarly, buyer sentiment remains positive, though a drop in interest rates has little to do with this optimistic outlook – most buyers shopping over the $2-million mark are less affected by the cost of borrowing." Sezlik expects that the luxury market will see consistent activity throughout the fall, followed by a typical upswing in the spring. Nationally, sales of luxury homes were up in the first eight months of the year, compared to the same period in 2023, in almost all major cities in Canada -— with the exception of the two most expensive markets, Vancouver and Toronto, as well as Halifax. Luxury markets in the Prairie provinces recorded some of the largest gains in sales activity year over year in the first eight months of 2024, led by Winnipeg, with Edmonton and Calgary close behind. This is reflective of the strong state of their overall markets, especially Alberta, which has proven more resilient than most of the country over the past year due to its continued strong demand from out-of-province buyers, the report said.