What is driving multi-million dollar home sales in Ottawa?

John King has been selling real estate in Ottawa for nearly three decades, but he has never seen anything like what has happened here in recent years.

“We’ve seen a pretty significant shift,” he says of the city’s real estate market. “There is now more wealth than ever in Ottawa. I think we have been undervalued for a long time, but we are now considered one of the great cities to live in worldwide.”

King would know. He has been the managing agent of Engel & Völkers Ottawa Central — one of the most recognizable luxury real estate brands with a truly international reach — since the company arrived in Ottawa six years ago.

Ottawa’s appeal is likely due to several attractions, he says. The federal government, of course. The growth of the technology industry has undoubtedly helped. So is the city’s accessibility to bike trails, ski hills, and spectacular natural settings like Gatineau Park, along with the city’s favorable affordability stats compared to larger centers like Toronto.

Luxury real estate gains ground amid overall weakening

Even as the local market is on track to post the first year-over-year decline in total unit sales in recent history—following a national cooldown—sales of luxury real estate in Ottawa are growing exponentially.

High-end real estate sales outpaced the broader Ottawa market: From January to March this year, the luxury market accounted for nearly 15 percent of all unit sales. That is significantly more than 8.6 percent in 2021 and just four percent in 2020.

Home sales worth $1 million or more are also on track to grow 47 percent from 2021, piggybacking on a 1,210 percent 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 prosperity in the city. “Business owners and entrepreneurs usually feed the super high-end stuff in Ottawa,” he explains. “It’s not even all people with technology – it’s two chiropractors who have a few clinics. Or it’s a dentist married to a gastroenterologist.”

Nor is it just one or two neighborhoods fueling the boom. The luxury market in Ottawa has been driven primarily 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 boomed in many other cities around the world, thanks in part to pandemic-driven demand and years of ultra-low interest rates.

Real estate market is back in 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 so bad, says King. Overheated real estate markets tend to fuel the greed of sellers. They also encourage ‘fly-by-night’ brokers looking to make a quick buck, which can further spiral out of control and create problems for sellers, buyers and long-term brokers alike.

“We will see that the market returns to balance,” explains King. After all, the average days a home in Ottawa is on the market is usually around 30 to 45 days — not the five or six we’ve become accustomed to during the pandemic. But that is also changing.

“The market is sinking,” he says, adding that as the number of listings and viewings for any property falls to pre-pandemic levels, “we will see a decrease in the number of brokers and a decrease in the average number of days on the market. . .”

Every advantage counts when selling your home

That easing means it’s more important than ever for buyers and sellers to take advantage of every advantage, including the most qualified, knowledgeable, and service-oriented brokers out there.

After all, every little bit counts to distinguish yourself from the rest in a competitive market. “And that’s really where Engel & Völkers agents excel,” says King, adding that his company’s established expertise in the luxury market and global reach are a perfect fit for current market conditions.

“We have the tools and the capability to market your home globally because it’s not just about putting up a sign on the lawn and arranging the comings and goings of people,” he says. “It’s about valuing your home well. It’s about good communication. It’s about good service, a tailor-made experience and distinguishing yourself through a luxury international brand and worldwide marketing.

“And that’s what you get at Engel & Völkers – period.”

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