Nearly 1 in 5 homes sold in Ottawa this year went for over $1M

The percentage of Ottawa home sales over $1 million has increased from four per cent of the market in 2020 to 18 per cent so far in 2022, according to a new report.

The real estate company Engel & Vlkers released its 2022 Mid-Year Luxury Real Estate Market ReportTuesday. Itsaidmarket data shows 1,378 houses and 22 condos in Ottawa had sold for between $1 million and $3.99 millionby June 30.

Another three houses went for more than $4 million each.

The report notes a 53 per cent increase in Ottawa'saverage home price since 2020, pushing average property prices up during a"COVID buying frenzy."

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According to Steve Pomeroy, a housing policy researcher who teaches at Carleton and McMaster universities, reaction to this shift will depend on perspective.

"If you're the owner of a home and your equity is increasing, sure, that's a good thing," Pomeroy said.

"If we're concerned about the general health of the housing market or affordability for young families trying to get into the markets, I don't think the market is particularly healthy."

If we're concerned about the general health of the housing market I don't think the market is particularly healthy.- Steve Pomeroy, researcher

According to Engel & Vlkers, more recent figures indicate the market has plateaued.

March brought instability with the invasion of Ukraine and looming interest hikes.

Junesaw a 39 per cent drop in sales compared toApril and May, with nearly 100 fewer homes selling for over $1 million. Sales had already dropped 16 per cent from March to April. The report saidhome sales under $1 million saw a similar trend.

Ottawa is "still a strong seller's market" according to the report, but "conditions are not as extreme as previous years."

"While June transactions do typically taper as many look towardtheir summer holidays, last month's sales were at a slower pace than we have seen in well over a decade," statedOttawa Real Estate Board (OREB) president Penny Torontow in a July 6 news release.

OREBis an industry association of about 3,800 local brokers and salespeople.Torontow's comments refer to all homes sold through itsMultiple Listing Service (MLS)system.

Torontow cited interest rates and inflation, sagging consumer confidence and "the uncertainty surrounding back-to-work arrangements" as possible factors.

Caution with industry takeaways

According to the Engel & Vlkersreport, the levelling off of home salessignals "the arrival of normal-leaning market conditions, which held steady through to June."

"Historically, real estate in Ottawa has always been and will continue to be stable and dependable in the long term. We aren't likely to ever experience the significant dips that other regions may see," said the OREB news release.

Pomeroyalso cautioned against accepting the conclusions of real estate firms who have a direct interest inthe market.

"The realtors are trying to calm nervesand [speak] to folks who may be thinking, 'I'll sit on the sidelines for a while because mortgage costs are getting a bit expensiveand prices appear to be moving downwards,'" Pomeroy said.

"Here, we've got a realtor coming out saying, 'Prices are normalizing. Don't worry, just jump in now."