Ottawa luxury home sales market cooled off to start the year, report says

The federal government is instituting significant changes to Canada's mortgage rules aimed at ensuring homeowners will survive an increase in interest rates. (File image/ The Canadian Press

Luxury home sales cooled in the first two months of the year in the city of Ottawa as affordability took a backseat to inventory, according to a new report.

Ottawa saw a seven per cent decrease in home sales over $1.2 million in January and February, the only Canadian region to see a decline in year-over-year luxury home sales.

"Fewer homes are listed for sale at the top end of the market this year, which has hampered sales activity to some extent," the RE/MAX report on luxury home sales reported.

"Less than 400 properties are currently available over $1.2 million, 30 per cent of which are priced over $2 million."

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RE/MAX says just 48 properties priced over $1.2 million were sold in January and February.

The most expensive home sold in Ottawa so far in 2024 was a home on Old Sunset Boulevard, which sold for $5 million, according to the real estate website Redfin.

"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," RE/MAX said.

"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."

The report from RE/MAX says there has been an increase in luxury condominium sales in Ottawa this year, with 12 condos sold for over $800,000 in January and February.

"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," RE/MAX said.

"An ample supply of condominium apartments is available, with 39 properties currently listed for sale."

Montreal saw a 55 per cent increase in year-over-year luxury home sales in January and February, while Saskatoon's luxury home market reported a 57 per cent increase. The report shows Toronto (167 homes) and Vancouver (155 homes) had the greatest number of luxury homes sold during the first two months of the year.