By Rebecca Pace
Ottawa residents are embracing the luxurious life.
Seventy-five luxury homes were sold from January to September in 2006 – a sizable increase compared to the 56 units which were sold in 2005, says Royal LePage Real Estate Services’ Carriage Trade Luxury Properties Report.
The 33.9 per cent sale increase was largely a result of high-end home purchases in the Rockliffe Park, Rothwell Heights, and Crystal Bay areas of Ottawa.
`According to the report, a luxury home in Ottawa is a dwelling valued over $750,000.
Brent McElheran, a sales representative for the Ottawa Royal LePage Team Realty, says price tags for Centretown homes aren’t typically that high. “There’s definitely an overall increase [in price] across the board, but we haven’t really reached the $750,000 range in Centretown,” he says. According to McElheran, Royal LePage sold only three Centretown homes above the $750,000 range in 2005.
Despite the report’s $750,000 definition, McElheran says any home valued over $500,000 would be considered “luxurious” in both the Centretown and Ottawa market. He says most of Centretown’s high-end homes are typically located in the Golden Triangle.
McElheran says the Ottawa housing market is “more conservative” than places like Toronto or Calgary, where luxury homes can cost $1 million or more.
According to the report, Calgary, along with Edmonton and Halifax, experienced the highest increase in luxury home sales as each reported sale increases of over 125 per cent.
Young families, empty-nesters, and professionals, he says, are typical luxury home buyers. McElheran says many high-end home purchasers like the old architecture and uniqueness that a house in Centretown offers.
Key selling features are often newly-renovated kitchens and four-bedroom homes, he says.
Bill Lenardon, a manager at the Ottawa RE/MAX Metro-City Realty Ltd., says he is noticing an increase in luxury home sales as well, even though the high-end purchases only account for five per cent of his overall sales.
Lenardon says many luxury home buyers tend to be diplomats from other countries looking for what the report refers to as “ambassadorial residences.”
He says many of these buyers are looking for homes which don’t require a lot of work – a hindrance, he says, in the Centretown area, as many houses are old and in need of repair.
But the increase in luxury home sales reflects more than peoples’ desire to possess granite kitchen countertops and two-car garages. In a Royal LePage press release, Phil Soper, president and CEO said,
“The pronounced increase in the number of luxury homes sold across the country is a strong reflection of Canadians’ confidence in the economy and the real estate market.”
Pascal-Yvan Pelletier, a market analyst for the Canada Mortgage and Housing Corporation, agrees, but says the increase is also reflective of the market’s low mortgage lending rate and strong employment.
Pelletier says the trend toward all things luxurious is also being seen in new home construction. He says year after year, more houses are being built with price tags that exceed $400,000. Pelletier says housing prices are on the upward climb as well.
In 2006, the average Canadian home sold for $256,000 – a 3.2 per cent increase from the 2005 selling price, he says.
In 2007, Pelletier says the average home is anticipated to fetch $262,000.