John King has sold real estate in Ottawa for nearly three decades, but he’s never seen anything like what’s happened here over the last few years.
“We have seen a pretty significant shift,” he says of the city’s real estate market. “There’s more wealth now than there’s ever been in Ottawa. I think for a long time we were undervalued, but we’re now deemed one of the great cities to live in worldwide.”
King would know. He’s been the managing broker of Engel & Völkers Ottawa Central – one of the most recognizable luxury real estate brands with truly international reach – since the company arrived in Ottawa six years ago.
Ottawa’s appeal is likely due to several pull factors, he says. The federal government, of course. The growth of the technology industry has undoubtedly helped. So has the city’s accessibility to bike paths, ski hills and spectacular natural surroundings like Gatineau Park, along with the city’s favourable affordability metrics compared to larger centres such as Toronto.
Luxury real estate gains ground amid overall softening
Even as the local market is on pace to post the first year-over-year decline in total units sold in recent memory – echoing a national cooling – luxury real estate sales in Ottawa are growing exponentially.
Indeed, high-end real estate sales have outpaced the broader market in Ottawa: from January to March this year, the luxury market accounted for nearly 15 per cent of all units sold. That’s up significantly from 8.6 per cent in 2021 and just four per cent in 2020.
Home sales valued at $1 million or more are also on track to jump 47 per cent from 2021, piggybacking on a 1,210-per-cent increase in that same category from 2015 to 2021.
King says that’s likely due to a combination of factors leading to what appears to be increasing affluence across the city. “Business owners and entrepreneurs are mostly fueling the super high-end stuff in Ottawa,” he explains. “It’s not even all technology people – it’s two chiropractors that own a few clinics. Or it’s a dentist married to a gastroenterologist.”
It’s not just one or two neighbourhoods fueling the boom, either. The luxury market in Ottawa has primarily been driven by gains in Westboro and McKellar Park, the Glebe, Old Ottawa South, Glabar Park, Island Park, New Edinburgh and Wellington Village.
King says the luxury market has also taken off in many other cities around the world, thanks in part to pandemic-driven demand and years of ultra-low interest rates.
Real estate market coming back into balance
But just as the growth of luxury real estate seems to be everywhere, so is the current cooling of the broader market thanks to rising interest rates.
That’s not such a bad thing, King says. Overheated real estate markets tend to fuel seller greed. They also encourage fly-by-night realtors looking to make a quick buck, which can push things even further out of whack and cause problems for sellers, buyers and long-term realtors alike.
“We’ll see the market come a little more back into balance,” King explains. After all, an Ottawa home’s average days on the market is typically around 30 to 45 days – not the five or six we’ve grown accustomed to during the pandemic. But that’s changing, too.
“The market is subsiding,” he says, adding that as the number of offers and showings for each property drops to pre-pandemic levels, “We’ll see a softening in the number of realtors and a softening of average days on the market.”
Every advantage counts when selling your home
That softening means it’s more important than ever for buyers and sellers to utilize every advantage, including the most qualified, knowledgeable and service-oriented realtors available.
Every little bit counts, after all, when separating yourself from the pack in a competitive market. “And that’s really where Engel & Völkers agents shine,” King says, adding that his firm’s well-established expertise in the luxury market and global reach are perfectly suited to current market conditions.
“We’ve got the tools and the ability to market your home globally because it’s not just about putting a sign on the lawn and being a referee of people coming and going,” he says. “It’s about pricing your home properly. It’s about good communication. It’s about good service, a bespoke experience and separating yourself through a luxury international brand and global marketing.
“And that’s what you get with Engel & Völkers – period.”