Home sales over $1 million have doubled in Ottawa

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The number of homes sold for at least $1 million has doubled as a share of Ottawa’s housing market, a new report says.

The mid-year luxury real estate report from Engel & Völkers showed Ottawa home sales in the $1-3.99 million range have doubled in 2022, accounting for 18 per cent of the market compared to nine per cent the previous year.

However, the number of those sales dropped by 39 per cent last month, part of the Ottawa market’s overall cooling to more typical conditions. There were 171 sales in June, down from 269 in May.

Overall home sales were down 29 per cent in Ottawa in June year-over-year.

“After two years of consistent record-breaking price growth and shrinking inventory, the Ottawa market is returning to a more balanced pace,” the Engel & Völkers report said. ”The market will continue to balance and return to seasonal sales patterns for the remainder of 2022.”

Since 2020, Ottawa has seen a 53 per cent increase in the average home price. The report shows how many Ottawa properties have been pushed into the $1-3.99 million price point during the market’s record growth.

In 2020, home priced over $1 million accounted for just four per cent of the market. That more than doubled to nine per cent in 2021, and doubled again to 18 per cent this year.

The year began with continued growth but plateaued in March, with looming interest rate hikes and rising global instability due to the war in Ukraine.

Then decreases followed in the $1-3.99 million range: down 16 per cent month-over-month in April, then unchanged in May, followed by that 39 per cent drop in June.

“Houses are sitting on the market longer than they had in 2020 and 2021, and the interest rate hikes have caused homebuyers to re-think their budget,” the report says. “However, even if prices hold or drop, many homeowners have seen a significant equity increase in their properties.”

The average residential sale price in the $1-3.99 million range has not changed significantly. It was $1.32 million in January and $1.33 million in June.

“The plateau in this price point signals a return to normal market conditions,” the report says.