Real Estate

Ottawa Real Estate market discussion

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  • Apr 24th, 2019 9:17 am
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Deal Fanatic
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Dec 27, 2009
6405 posts
3595 upvotes
Ottawa, ON
audiorichard wrote:
Feb 18th, 2019 1:12 pm
I think the trend is people do not like to live in a big house, the size of the family is getting smaller. People choose to being single, or even they have married, they choose to not have kids. Even they plan to have kids, they only plan to have one or maximum two kids. Unlike my parents generation, four to six kids are very common.
People enjoy to travel more often, you will find that the city is half empty during Christmas and summer. Anyway, I can foresee that the big house (3000 sq ft +) is getting harder and harder to sell in the future. On the other hand, good location semi and townhouse will see a larger growth for the next few years.
I think it is the opposite of what you are saying. People are buying stupidly huge houses that fill the whole lot (and there are only 2 people living in them). Ugly big McMansions - ugg.
Member
Aug 14, 2007
406 posts
169 upvotes
Ottawa
rocurs wrote:
Feb 19th, 2019 9:47 am
Ottawa is a city of 1 million people, basically in the middle of nowhere. There is no reason why land should have gotten expensive other than the greed of developers.
Well, everything is getting more and more expansive. For all the new development, almost 30% is related to taxes. The labour and material cost are rising quickly for the past five year. For example, electrical wire 14/2 price is up more than double within few years, not to mention the minimum wage in Ontario which have a huge impact for the trade. On top of that, the builder sale told me that different type of tariffs increase the cost of the material cost in 2018.

By the way, I know few small builders in Westboro who buy old house and build semi, and they have been doing it successfully for the past 10 years. One of the builder even only use the same semi floor plan, then "copy and paste" in different area in Westboro, he have been doing it for at least 15 semi. By doing this, the builder can cut cost, hire the same trade and avoid any potential issues. That is why if you drive around Westboro neighbourhood, you will see the "same" style of semi in different street. I still remember that the "same" semi was used to be around 700k, and now they are all over 1million.
Last edited by audiorichard on Feb 19th, 2019 12:18 pm, edited 1 time in total.
[OP]
Deal Addict
Nov 26, 2004
2268 posts
344 upvotes
jk9088 wrote:
Feb 18th, 2019 10:51 pm

Hasn't that already happened in areas that are being gentrified like Westboro, Glebe, etc? (And spreading outwards from those areas e.g. Alta Vista.) I'm not sure about the zoning but do they even need permission to subdivide the lots? You see a lot of older houses on wider lots being bought up, torn down, and rebuilt into ultra-modern semi-detached houses. So the original single lot is being divided into two smaller lots. As long as it is still being used for residential purposes, does the zoning actually need to be changed?
Yes, it is happening, however, most of the time, the property that is being torn down already currently sits on the "correct" zoning. You just can't tear down any old house a build a semi on it. The house that is being torn down must currently sits on a R2 lot.

When you have time, give this a read. I found this to be a pretty good read, as it gives people a good understanding on what is allow to be built on a particular lot.

https://ottawa.ca/en/part-6-residential ... ns-155-168

After all, if the city allows intensification and rezone an area that is currently zoned R1 GG and rezoned into R1 W or better yet, from R1 to R2, that will be a boon to the homeowners in the area.

When I was talking about ritzy neighborhood, I was more thinking something in line of this.

Builders pay list price for a house like this one.
https://www.realtor.ca/real-estate/2033 ... st-heights

Tear it down, and build a 3500 sq ft home and put it up for sale like these one.
https://www.realtor.ca/real-estate/1983 ... st-heights
or
https://www.realtor.ca/real-estate/1995 ... alta-vista
or
https://www.realtor.ca/real-estate/2007 ... st-heights
Jr. Member
Jun 7, 2010
188 posts
16 upvotes
@William W What would be the profit margin for the builder assuming above buy and sell price? Anyone care to enlighten us?
[OP]
Deal Addict
Nov 26, 2004
2268 posts
344 upvotes
deadsea wrote:
Feb 19th, 2019 12:11 pm
@William W What would be the profit margin for the builder assuming above buy and sell price? Anyone care to enlighten us?
Construction cost will probably run around $250 to 300 sq/ft give or take depending on level of finish, plus the cost to acquire the land. I would think gross profit will be around $500k. Though, holding cost, closing cost, and tax is going to eat into a significant portion of this gross profit.
Deal Addict
Jan 15, 2017
2096 posts
1459 upvotes
cyberfreak123 wrote:
Feb 19th, 2019 9:13 am
impact of the stress test on the Ottawa real estate market. A realtor's opinion.
https://peggyblairrealtor.wordpress.com ... come-down/
Wow - an opinion piece full of inaccuracies.

Ottawa real estate prices are not "skyrocketing". There is no evidence to support that claim at all, with year over year increases less in the 5% range. Hardly "skyrocketing."

The B20 Guidelines were not brought in to make it harder for first time buyers to borrow more money. It wasn't targeted to first time buyers at all, but originally targeted to high ratio mortgages. High ratio mortgages are not reserved for just first time buyers. The federal gov't also did not impose B20 to cool the overheated markets in Vancouver and Toronto. B20 was imposed to strengthen residential mortgage underwriting by introducing 5 principles to sound mortgage underwriting.

Nothing has changed with regard to bridge financing requirements. I don't really understand how that enters into the discussion.

As for the number of new listings, I find it difficult to believe the statement, " It’s not unusual now to see only a handful of new listings on a given day in a city of almost a million people, at a time when 100-200 new listings would be average." 200 new listings a day average? 6000 new listings a month average?

Just more marketing garbage from the real estate industry.
Member
Jul 25, 2008
302 posts
173 upvotes
ottawa
OREB numbers came out last week, realtors tend to throw that out on personal distribution lists/blogs/articles shortly thereafter (i got mine today too).

This is how the OREB (and every REB) works. OREB gets the data and spins the numbers, then realtors spin it more, then the public gets the best version of the facts to boost demand and convince them home prices are rising (or not falling as badly, or about to recover, whatever the economic scenario is).

We need better, transparent data, controlled and released by someone without a conflict of interest.
Newbie
Nov 10, 2014
93 posts
57 upvotes
Ottawa, ON
Weird question, but please bear with me.

What areas/ neighbourhoods in Ottawa are over represented with Asian buyers? Its no secret that Asians (specifically Chinese) have an out-sized influence in driving home prices in Canada. Consequently, neighbourhoods that attract more Chinese buyers should outperform other neighbourhoods.

I tend to see many Asians in Kanata and Barrhaven area. Are there any other pockets of Ottawa where Asians cluster? Do areas like Kanata and Barrhaven have the potential to become the new Markham and Richmond Hill or is that phenomenon exclusive to the GTA?
Newbie
Mar 3, 2011
32 posts
5 upvotes
Ottawa
Tadalafil wrote:
Feb 21st, 2019 12:02 am
Weird question, but please bear with me.

What areas/ neighbourhoods in Ottawa are over represented with Asian buyers? Its no secret that Asians (specifically Chinese) have an out-sized influence in driving home prices in Canada. Consequently, neighbourhoods that attract more Chinese buyers should outperform other neighbourhoods.

I tend to see many Asians in Kanata and Barrhaven area. Are there any other pockets of Ottawa where Asians cluster? Do areas like Kanata and Barrhaven have the potential to become the new Markham and Richmond Hill or is that phenomenon exclusive to the GTA?
For me I always see Barrhaven with a cluster of asians. And I just don’t mean Chinese/oriental but south/Indians asians as well. All the grocery is nearby (TNT as wel) but overall not too sure why.

I don’t think it’ll ever be like markham or Richmond hill though. I don’t think Ottawa is big enough.
Sr. Member
Oct 2, 2017
547 posts
360 upvotes
Almost every house that's going up in Ottawa is using Sellers Direction. That shows you how hot the market is in Ottawa. They are being sold for above asking guaranteed
I'll see you at the top, cause the bottom is too crowded
Deal Addict
Jan 15, 2017
2096 posts
1459 upvotes
azmongold wrote:
Feb 21st, 2019 7:52 am
Almost every house that's going up in Ottawa is using Sellers Direction. That shows you how hot the market is in Ottawa. They are being sold for above asking guaranteed
Doesn't show me anything. The process used to list the house does not indicate to me whether or not the market is hot. Being sold over asking isn't an indication either as all you have to do is list below market value and you are almost certain to get sold above asking.

A hot market to me is based on results. Are prices significantly higher than normal. The historical yearly price increase in Ottawa is currently about 5.74%. A hot market for me would have yearly price increases that significantly pass 5.74%. Last year's price gains didn't even meet the 5.74%, so below average year. As a homeowner, I am hopeful that this year's gains will surpass last year's. We need above average gains just to make up for ground we lost since 2011.
Deal Addict
Jul 4, 2004
4471 posts
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Ottawa
skeet50 wrote:
Feb 21st, 2019 8:33 am
Doesn't show me anything. The process used to list the house does not indicate to me whether or not the market is hot. Being sold over asking isn't an indication either as all you have to do is list below market value and you are almost certain to get sold above asking.

A hot market to me is based on results. Are prices significantly higher than normal. The historical yearly price increase in Ottawa is currently about 5.74%. A hot market for me would have yearly price increases that significantly pass 5.74%. Last year's price gains didn't even meet the 5.74%, so below average year. As a homeowner, I am hopeful that this year's gains will surpass last year's. We need above average gains just to make up for ground we lost since 2011.
I do think you're right to say that properties selling above asking price isn't actually a sign of a strong market and agree with you that ultimately, price increase between comparable homes is what dictates the strength of the market.

That said, it does look pretty strong. Looking at the past 100 sales in Ottawa (includes rural), which was over the past couple of weeks, almost 80% of them did sell at or above list price (which again is debatable as an indicator) and all but 1 of them sold in 13 days or less of being on the market. I have to admit that I hadn't realized it was "looking" that strong.
Member
Aug 16, 2011
257 posts
137 upvotes
OTTAWA
michelb wrote:
Feb 21st, 2019 10:19 am
I do think you're right to say that properties selling above asking price isn't actually a sign of a strong market and agree with you that ultimately, price increase between comparable homes is what dictates the strength of the market.

That said, it does look pretty strong. Looking at the past 100 sales in Ottawa (includes rural), which was over the past couple of weeks, almost 80% of them did sell at or above list price (which again is debatable as an indicator) and all but 1 of them sold in 13 days or less of being on the market. I have to admit that I hadn't realized it was "looking" that strong.
5.74% is mediocre i would say... but historically on par in Ottawa... try 20-30% in Vancouver in 2016-2017, 30-40% in certain cities in China... that's why i love Ottawa.. slow and steady.. there's no FOMO and crazy money going in here... YET!
Member
Aug 6, 2011
410 posts
135 upvotes
Jeremyl007 wrote:
Feb 21st, 2019 10:26 am
5.74% is mediocre i would say... but historically on par in Ottawa... try 20-30% in Vancouver in 2016-2017, 30-40% in certain cities in China... that's why i love Ottawa.. slow and steady.. there's no FOMO and crazy money going in here... YET!
Consistent healthy increase is very good IMO. There's no market bubble, for whoever is afraid of that. Ottawa is still a reasonable place to buy and invest. If one counts the leverage, that 5% increase is translated in much higher return. Ottawa will never see those crazy increase until there's a serious shortage of lands to build.
Member
Aug 6, 2011
410 posts
135 upvotes
skeet50 wrote:
Feb 21st, 2019 8:33 am
Doesn't show me anything. The process used to list the house does not indicate to me whether or not the market is hot. Being sold over asking isn't an indication either as all you have to do is list below market value and you are almost certain to get sold above asking.

A hot market to me is based on results. Are prices significantly higher than normal. The historical yearly price increase in Ottawa is currently about 5.74%. A hot market for me would have yearly price increases that significantly pass 5.74%. Last year's price gains didn't even meet the 5.74%, so below average year. As a homeowner, I am hopeful that this year's gains will surpass last year's. We need above average gains just to make up for ground we lost since 2011.
Pricing a house slightly below price market price is a strategy to create a bidding war, and the strategy only works well in a hot market, where there're more demands than the supply available. Sometimes the bidding pushes the sold price above the seller's target price.

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