While luxury home-buying activity in Ottawa was strong out of the gate, sales softened somewhat in February with affordability taking a backseat to inventory. Just 48 freehold properties priced over $1.2 million changed hands in the first two months of 2024, down over seven per cent when compared to the 52 sales that took place between January and February of 2023.
Fewer homes are listed for sale at the top end of the market this year, which has hampered sales activity to some extent. Less than 400 properties are currently available over $1.2 million, 30 per cent of which are priced over $2 million.
Equity has played a role in luxury sales this year, as existing homeowners seek to leverage gains against softer housing values. When combined with lending rates that are trending lower, buyers are finding that affordability has improved and what was once beyond their grasp is now attainable.
Buying patterns have also changed in the high end this year, given increased demand for detached properties that offer greater privacy and larger lot sizes. As a result, there have been more sales occurring in suburban-rural neighbourhoods, including Stittsville, Kanata, Riverside South, Greely, and Manotick. Demand for more traditional areas, such as McKellar Heights and Westboro, have experienced an uptick. Fewer sales have occurred in Ottawa’s coveted Golden Triangle.
Luxury condominiums have experienced a slight increase in sales over year-ago levels. Twelve properties were sold over the $800,000 price point in January and February of 2024, up from 10 during the same period in 2023. Condominiums continue to be a popular choice amongst young professionals and downsizing empty nesters and retirees who want to be in the city’s core. An ample supply of condominium apartments is available, with 39 properties currently listed for sale.
Heated home-buying activity at lower price points, characterized by strong demand and multiple offers, is expected to spill over into Ottawa’s luxury market in the second quarter of the year. While a bounce-back is anticipated in the top end, fuelled by lower lending rates and lower housing values, concerns in the civil service sector over the possibility of a federal election could serve to dampen buyer enthusiasm in the short term.