Luxury home-buying activity experienced a substantial uptick in the Ottawa real estate market during the first two months of 2025, with single-family detached freehold sales rising almost 57 per cent year over year. Forty-seven properties changed hands over the $1.3 million price point, compared to 30 during the same period in 2024. Condominium sales over $1.3 million have remained stable, with three sales recorded in January and February of both this year and last.
Read the national reportHome sales between $1.3 million and $1.5 million were relatively brisk, while sales over the $1.5 million price point fell short of year-ago levels. Recent upward pressure on values in the Ottawa real estate market prompted the sale of several properties in multiple offers. Freehold sales continue to dominate, with single-family detached homes most sought after. Luxury sales over $1.3 million represented seven per cent of total residential sales, while condos at that price point registered less than .05 per cent.
Many luxury sellers, including Baby Boomers and Gen X, are downsizing or making lateral moves into the Ottawa housing market this year, to be closer to amenities, while others are trading up to larger properties or more desirable areas. Manotick was especially popular for its homes situated on acreage properties. Rockcliffe Park and Westboro remain perennial favorites with the move-up segment of the market. Custom-built homes on one-acre lots in Greely are gaining a following. Suburban markets have also drawn buyers, especially in Kanata, Barrhaven and Orleans. A smaller percentage of sellers are retiring and moving out of the province to Nova Scotia where their dollar goes further. The promise of lifestyle and closer proximity to amenities is enticing. Immigration has also played a role in the Ottawa real estate market, with newcomers who have settled in buying higher-end housing.
Multi-generational living is becoming increasingly popular in Ottawa, particularly in homes offering separate in-law suites and more flexible layouts. Buyers are also looking for properties with smart home features that are energy efficient. Turnkey homes are also sought after, especially those that have been staged.
Inventory levels remain healthy, with properties that are well-priced and in little need of work moving quickly. Buyers were out in full force out of the gate in 2025, particularly between $1.3 million and $1.5 million, with interest rates trending downward. Sellers, on the other hand, were skittish, although some moved forward with their plans to sell while others are waiting to see how recent politics will play out.
The market was off to a strong start in January and tapered somewhat in February due to several factors, including winter storms, US tariffs and economic uncertainty. With talk of an upcoming election, concerns over job security are expected to persist in coming months, with many working in the public service shelving home-buying plans until there is greater clarity for the future.
Overall, there appears to be greater stability in the upper end this year, with prices holding steady and, in some instances, rising. Interest rates are trending downward, and an increasing number of buyers are returning to variable mortgages. While some sellers are unrealistic in their expectations, those that are more reasonable are successful in selling their homes. Inventory levels are expected to come down as more product is absorbed, with supply and demand working in tandem. While the market trajectory will hinge largely on consumer confidence, home-buying activity is expected to remain relatively stable in the coming months.
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While rapid population growth and strong economic initiatives have served to fuel activity in the luxury segment of the London real estate market in recent years, talk of US tariffs on the steel and automotive industries have given would-be purchasers reason to pause, with many buyers at the top end of the market adopting a wait- and-see approach.
Luxury sales over $1 million represent approximately eight per cent of overall home-buying activity in the London real estate market this year. Seventy-one properties sold over $1 million in the first two months of the year, up 22 per cent over the 58 sales that occurred during the same period in 2024. Falling interest rates and government changes including extending mortgage insurance to $1.5 million and raising amortization periods to 30 years helped to propel activity early in the year, but since mid-February, there has been pullback in the market as concerns over the economy and stock market volatility grow.
Read the national reportHousing values at luxury price points have softened as inventory levels climb, with the number of homes listed for sale nearing 400. Communities within the city, including North London and Southwest London, and on the periphery in areas such as Dorchester and Ilderton continue to draw buyers in the top end, with well-priced properties selling within a reasonable amount of time.
Multi-generational housing has experienced increasing demand in the London real estate market, with two-unit homes with a detached third unit now permitted. Affordability has played a role in the growing demand for these types of properties. Some developers are now building purpose-built, two-unit homes that allow buyers to offset mortgage payments by renting a portion of their home.
Population in the London CMA has soared in recent years to almost 630,000 people, according to Statistics Canada, with the city adding more than 40,000 new residents since 2021/2022. The local government remains vested in economic growth, with significant growth and investment realized in the technology sector, as well as manufacturing and agri-food processing. London remains progressive in land development, ensuring that the infrastructure on tracts of land along Hwy. 401 are shovel-ready for new plants and industry that will bring more jobs to the community. As economic stability returns to the region and interest rates decline further, home-buying activity, especially at the top end of the market, is expected to rebound.
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