Real Estate

Ottawa Real Estate market discussion

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  • Nov 15th, 2019 8:58 am
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Deal Addict
Nov 13, 2013
1700 posts
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Ottawa
skeet50 wrote:
Feb 10th, 2019 9:44 pm
CMHC has data on new builds. In Ottawa, for instance, we had 185 new starts in Jan '19 compared with 423 in Jan '18. We had 374 completions in Jan '19 compared to 531 in Jan '18. Average absorbed price for single detached units in Jan '19 was $587K compared to $558K in Jan '18. This compares to an average price of $432K for resale in Jan '19. Just keep in mind that the resale average price includes attached and detached units.

https://www03.cmhc-schl.gc.ca/hmip-pimh ... 5/3/Ottawa
That is less increase than I would have expected though again lots of variables these averages don't always reflect.. Generally every new development the land is worse and worse. Further from Ottawa or further from the centre of the community's main street etc. There are also two largish developments in more central locations probably for the first time in many years. Greystone and Waterridge. Not a ton of SFHs in either development but those that there are probably break 7 figures.
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Aug 6, 2011
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skeet50 wrote:
Feb 10th, 2019 9:44 pm
CMHC has data on new builds. In Ottawa, for instance, we had 185 new starts in Jan '19 compared with 423 in Jan '18. We had 374 completions in Jan '19 compared to 531 in Jan '18. Average absorbed price for single detached units in Jan '19 was $587K compared to $558K in Jan '18. This compares to an average price of $432K for resale in Jan '19. Just keep in mind that the resale average price includes attached and detached units.

https://www03.cmhc-schl.gc.ca/hmip-pimh ... 5/3/Ottawa
The new built are further and further away from the centre. And yet they cost more. It's not good to be on the sidelines in the past 2 years.
I'd be curious about the increase for townhouses. From what I read in this forum, it should be a lot more than the 5.3%. If it wasn't of the stress test, we'd see bigger increase in the new detached houses.
Last edited by cyberfreak123 on Feb 11th, 2019 9:08 am, edited 1 time in total.
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Jan 15, 2017
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fogetmylogin wrote:
Feb 11th, 2019 2:14 am
That is less increase than I would have expected though again lots of variables these averages don't always reflect.. Generally every new development the land is worse and worse. Further from Ottawa or further from the centre of the community's main street etc. There are also two largish developments in more central locations probably for the first time in many years. Greystone and Waterridge. Not a ton of SFHs in either development but those that there are probably break 7 figures.
One thing to remember about new builds is the absorbed price now is the price paid when the buyers first signed the purchase agreement. This is typically one to two years previously. It is not reflective of the prices people are paying to enter into purchase agreements today.

Communities like Greystone and Waterridge are commanding higher prices, but they take longer to sell and most likely have minimal affect on overall averages. Minto and Mattamy are the largest builders and are selling many homes now on 30' lots at a lower price point. Richcraft, for instance, is now selling PH3 of TrailsEdge in Orleans and its lots are 31' & 35'.

For me, what is most interesting is the gap that exists between resale and new home prices. It is something that I think that new home buyers should consider as when the new home buyers decides to one day sell their home, they are now competing in the resale market where the average price and demand is significantly less than that for the new build market.
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May 30, 2016
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skeet50 wrote:
Feb 11th, 2019 9:08 am
...
It is something that I think that new home buyers should consider as when the new home buyers decides to one day sell their home, they are now competing in the resale market where the average price and demand is significantly less than that for the new build market.
Maybe not in the present market.

In fall 2017, I started to look at resale houses around 400K. All the ones I could find around Barrhaven were old and needed a lot of love! I calculated I had to add at least 25K to replace some windows, shingles, garage door etc..)  and a bit more for floors, Kitchen cabinet and counter, paint ...etc....

Mattamy and Minto were offering new detached houses starting from 400K. After a few "necessary" upgrades, it ends up around 415-425K for a turnkey house. There are still some disadvantages like:
  • Takes at least a year to get delivered
  • Small land
  • Mutliple apointments...could be stressful for some but some people like me love it.

But if you can deal with these...It seems a better choice at the end
Deal Addict
Nov 11, 2004
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Ottawa
Dont you need to pay tax on a new build aswell?
Hello
Member
Jun 15, 2009
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Nepean
For rental, you get it back after 3-6 months of tenant moving in.
ilusa wrote:
Feb 11th, 2019 1:25 pm
Dont you need to pay tax on a new build aswell?
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Jul 4, 2004
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Ottawa
Superbobby wrote:
Feb 11th, 2019 1:11 pm
Maybe not in the present market.

In fall 2017, I started to look at resale houses around 400K. All the ones I could find around Barrhaven were old and needed a lot of love! I calculated I had to add at least 25K to replace some windows, shingles, garage door etc..)  and a bit more for floors, Kitchen cabinet and counter, paint ...etc....

Mattamy and Minto were offering new detached houses starting from 400K. After a few "necessary" upgrades, it ends up around 415-425K for a turnkey house. There are still some disadvantages like:
  • Takes at least a year to get delivered
  • Small land
  • Mutliple apointments...could be stressful for some but some people like me love it.

But if you can deal with these...It seems a better choice at the end
I would also add that with a new home you also may have to deal with build quality issues (pretty much everyone I know (myself included) had some quality problems that had to be dealt with the builder which can be a total pain), you might have to move in while construction in ongoing (e.g. neighbors is not built yet) and you don't benefits from add-ons that might be in a resale (fence, rain gutters, window coverings, automatic garage door opener(s), etc). A buyer that wants a pool might do much better buying a resale as they are one of those things that you often only get a fraction (if anything) back on resale (e.g. a pool and landscaping can easily cost $75k but you'd probably be lucky to get $25k back on closing and I think in many case, will get almost nothing for it).
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Jul 4, 2005
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Any investors out there looking at pre construction towns/singles or already in the market?
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Jan 15, 2017
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Superbobby wrote:
Feb 11th, 2019 1:11 pm
Maybe not in the present market.

In fall 2017, I started to look at resale houses around 400K. All the ones I could find around Barrhaven were old and needed a lot of love! I calculated I had to add at least 25K to replace some windows, shingles, garage door etc..)  and a bit more for floors, Kitchen cabinet and counter, paint ...etc....

Mattamy and Minto were offering new detached houses starting from 400K. After a few "necessary" upgrades, it ends up around 415-425K for a turnkey house. There are still some disadvantages like:
  • Takes at least a year to get delivered
  • Small land
  • Mutliple apointments...could be stressful for some but some people like me love it.

But if you can deal with these...It seems a better choice at the end
Yes, you can still get a new build at a price close to the average price in the resale market, just depends on the builder and the location.

My point was that if you bought the average detached new build at $587 and then decided to sell it, you are selling it in the resale market with an average price of $432. Even though when you bought the new build at $587 it was an average price for a new build, when you list it in the resale market it will not be an average price in that market. So when new, it was average. When reselling, it is above average.
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Dec 27, 2009
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Superbobby wrote:
Feb 11th, 2019 1:11 pm
Maybe not in the present market.

In fall 2017, I started to look at resale houses around 400K. All the ones I could find around Barrhaven were old and needed a lot of love! I calculated I had to add at least 25K to replace some windows, shingles, garage door etc..)  and a bit more for floors, Kitchen cabinet and counter, paint ...etc....

Mattamy and Minto were offering new detached houses starting from 400K. After a few "necessary" upgrades, it ends up around 415-425K for a turnkey house. There are still some disadvantages like:
  • Takes at least a year to get delivered
  • Small land
  • Mutliple apointments...could be stressful for some but some people like me love it.

But if you can deal with these...It seems a better choice at the end
Not on your life would I pay the price to live on a postage stamp lot a few feet from my neighbours. I don't even know why they bother detaching some of these new builds. The space between them is so small you could barely fit through there. Must be a major league pain if some work actually needs doing to the side.
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Nov 13, 2013
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Ottawa
Chickinvic wrote:
Feb 12th, 2019 12:45 am
Not on your life would I pay the price to live on a postage stamp lot a few feet from my neighbours. I don't even know why they bother detaching some of these new builds. The space between them is so small you could barely fit through there. Must be a major league pain if some work actually needs doing to the side.
They do it because then people say oh I can get a new single family house for only $425k. Yes it is basically a townhouse but people do like to have their own walls. They do meet a need for that product and most people don't use their backyards much anyway. Apples to Oranges comparison to say you are better off buying new.
[OP]
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Nov 26, 2004
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michelb wrote:
Feb 11th, 2019 2:24 pm
I would also add that with a new home you also may have to deal with build quality issues (pretty much everyone I know (myself included) had some quality problems that had to be dealt with the builder which can be a total pain), you might have to move in while construction in ongoing (e.g. neighbors is not built yet) and you don't benefits from add-ons that might be in a resale (fence, rain gutters, window coverings, automatic garage door opener(s), etc). A buyer that wants a pool might do much better buying a resale as they are one of those things that you often only get a fraction (if anything) back on resale (e.g. a pool and landscaping can easily cost $75k but you'd probably be lucky to get $25k back on closing and I think in many case, will get almost nothing for it).
I'm currently going through the process of dealing with imperfection of a new built. Fortunately, the reality is most of the issues are very minor in nature, they are more or less drywall and paint, a chip on the floor as well as the wrong knobs for a vanity. I would say I could have dealt or live with 95% of the items on the 30 days list. However, because it was covered under warranty, I decide not to lift my fingers and left these "build quality issues" to the builders to fix. A plus for having warranty on a new built is during the cold weather, I noticed there was some frozen condensation between the panes of a window. Turns out that there was a crack hidden in the corner behind the weather stripping where 95% of the people would have missed the crack if they were not specifically looking for it.

All to say if I were buying a resale, I would have either live with the imperfection, fix it myself and pay out of pockets to replace the broken windows. Whereas with a new built, yes, coordinating with the warranty office can be a bit of a pain, but at least there is a warranty to fall back on and you are not spending time or paying out of pocket again to bring the home to "perfection".
[OP]
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Nov 26, 2004
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jeeva86 wrote:
Feb 11th, 2019 5:20 pm
Any investors out there looking at pre construction towns/singles or already in the market?
Given how builders are setting their price right now, not saying prices will not continue to go up, but the buyers are bearing the risks when they closes in 12 - 24 months.

It is more work, but if I am trying to make some money in the real estate market right now, I would be looking at "fix and flip" as you still have time to unload if there is a change in government this fall.
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Jul 25, 2008
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ottawa
William W wrote:
Feb 12th, 2019 7:35 am
Given how builders are setting their price right now, not saying prices will not continue to go up, but the buyers are bearing the risks when they closes in 12 - 24 months.

It is more work, but if I am trying to make some money in the real estate market right now, I would be looking at "fix and flip" as you still have time to unload if there is a change in government this fall.
Yeah, there's definitely risk in new construction in this environment, and I'd avoid it if looking to flip in the short term. This advice is obviously bad for developers, who are having trouble qualifying first time buyers as well. Some projects probably get delayed or cancelled until the market normalizes. That's a downward pressure on supply and therefore an upward pressure on price.

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