Real Estate

Ottawa Real Estate market discussion

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  • Nov 29th, 2020 10:27 am
Member
May 6, 2012
250 posts
144 upvotes
KANATA
skeet50 wrote: Most hiccups to WFH are cultural, not technical. The technical capabilities have been available for years now it's just that people have resisted it. You can't continue to still work the way that you used to. It requires changing the way you manage performance, how you measure productivity and how you solve problems. It also requires that leaders become even more adept at using technology which many still are not. Using your example of standing in front of a white board and brainstorming, for instance, studies have shown years ago that teams brainstorming has never proven to be effective in solving problems, yet getting people to move away from it has been a huge challenge as it feels like it's working.
If company asks me to WFH, I would ask them to pay part of the utilities that I used at home; I would ask them to compensate me using my home as office, what if I don't have that space? If my couple is WFH too, I have to set up 2 offices at home, which means one of us probably has to work in the basement. Does that suck? Another big thing, they would have to pay me to get a commercial high speed internet because residential internet simply sucks at work. By the way, when I was WFH, I broke 2 test boards just because no hardware people around me to support...
Member
Jan 29, 2020
309 posts
329 upvotes
welcomelm wrote: If company asks me to WFH, I would ask them to pay part of the utilities that I used at home; I would ask them to compensate me using my home as office, what if I don't have that space?
I don't know what your situation is, but the cost of commuting is quite high and you will probably easily recover any investment you have to make in a proper work setup.

If I live in Barrhaven and have to commute 5 days a week for 49 weeks of work (I only get 3 weeks vacation), it's 2 hours a day representing $32 267 per year in notional value. That's if I value my time at what my employer pays me, which is probably a fair estimate.

To this, add the cost of fuel/insurance/tires/depreciation if I drive, which would be in the $12k per year range. Or a bus pass which would be in the $1200 per year range.

It is hard to put a value on two more hours a day with your family. And not being exhausted all the time from 2 hours of commuting every day.

Now consider that you don't have to live in Barrhaven anymore, which is about the furthest you would want to live if you worked downtown. Instead, you can live in a nicer place where you can buy a 2000 sq ft all-brick two storey house with a 2 car garage on a decent lot, in the $475k range. This is in fact my current situation, 2 hours away from downtown Ottawa, where I live on the water.
Deal Addict
Jan 15, 2017
3523 posts
2876 upvotes
WFH may certainly change not only the demand for where we live, but also the homes that we will need to buy. In the past decade we have seen the home office fall out of favour as we embraced mobile devices. That could now change as WFH will require a dedicated office space with privacy and security and the need to walk away from the work day at the end of the day. Working on the kitchen table may be a short term solution, but it will hardly work in the long term. Having to find office space at home could make that 1 bedder condo not feasible anymore.
Deal Addict
Jan 15, 2017
3523 posts
2876 upvotes
welcomelm wrote: If company asks me to WFH, I would ask them to pay part of the utilities that I used at home; I would ask them to compensate me using my home as office, what if I don't have that space? If my couple is WFH too, I have to set up 2 offices at home, which means one of us probably has to work in the basement. Does that suck? Another big thing, they would have to pay me to get a commercial high speed internet because residential internet simply sucks at work. By the way, when I was WFH, I broke 2 test boards just because no hardware people around me to support...
That's great that you would have these demands to WFH, my wife also WFH and she doesn't have any other these demands. We are saving money not having to commute, not having to pay parking, not having to buy a work wardrobe, not buying lunches and coffee. We have a dedicated home office that provides her with the security and quiet that she needs to conduct any work that is needed.

I understand that your personal circumstances may not be favourable to WFH, I hope you realize though that there are many, many more whose personal circumstances are better suited to WFH.
Member
May 6, 2012
250 posts
144 upvotes
KANATA
Cashforlife wrote: I don't know what your situation is, but the cost of commuting is quite high and you will probably easily recover any investment you have to make in a proper work setup.

If I live in Barrhaven and have to commute 5 days a week for 49 weeks of work (I only get 3 weeks vacation), it's 2 hours a day representing $32 267 per year in notional value. That's if I value my time at what my employer pays me, which is probably a fair estimate.

To this, add the cost of fuel/insurance/tires/depreciation if I drive, which would be in the $12k per year range. Or a bus pass which would be in the $1200 per year range.

It is hard to put a value on two more hours a day with your family. And not being exhausted all the time from 2 hours of commuting every day.

Now consider that you don't have to live in Barrhaven anymore, which is about the furthest you would want to live if you worked downtown. Instead, you can live in a nicer place where you can buy a 2000 sq ft all-brick two storey house with a 2 car garage on a decent lot, in the $475k range. This is in fact my current situation, 2 hours away from downtown Ottawa, where I live on the water.
I guess I am a little different. My house is 2200 sqft with only one office and my wife takes it. I have to work on the dining table with son facing me from the other end. Without pandemic, I drive 6/7 minutes to work, my son's school and daycare are all within 10 minutes. Also I do have the emotional need to be in touch with real people instead of cold machines everyday. I am happy with things used to be.
Deal Addict
Dec 4, 2016
1856 posts
882 upvotes
Cashforlife wrote: I'm trying to understand why, just asking for information not trying to be disputatious? I designed communications chips in Kanata, specifically physical interfaces for 10 Gbps fibre transceivers through which probably all the posts in this forum are going, unless they've been replaced. I worked on a computer that cost $150k in those days, but which would probably cost $3000 today. I did mixed signal design so I was using electromagnetic and circuit simulators. I did it in a cubicle but I could have done it in my home office. I had a lot of colleagues doing the digital side which is really a kind of computer programming. They just used Verilog or VHDL instead of C++. All of this work could be done remotely, as far as I remember.

With this type of knowledge work done remotely, the employee is happier because no commute and no constraints to live in an expensive area. The employer is happier because no expensive rent in a fancy area, assuming the employee has the discipline to actually work at home. Basically if you made it through engineering school, you know how to work.
It's more of a culture thing. More hardware oriented companies often have in-house labs where certain employees can't work from home. The rest of the employees can work from home, but it's often more productive for the designers working in front of a computer to be in the same building as the engineers who has to show up in person. During COVID, anyone who's staring at the computer would obviously be working from home, and even people who has to come in to play with the toys would only come in when they have to. After COVID, I expect most of the WFH people to show up in office again, assuming the office is in Kanata. And I don't expect companies to significantly downsize their office such that only those who do need to come in has an office.

The whole attraction of Kanata is the relatively low housing prices and short commute, as well as reasonable commercial rent, compared to downtown.
Deal Fanatic
Jul 4, 2004
5708 posts
1769 upvotes
Ottawa
welcomelm wrote: If company asks me to WFH, I would ask them to pay part of the utilities that I used at home; I would ask them to compensate me using my home as office, what if I don't have that space? If my couple is WFH too, I have to set up 2 offices at home, which means one of us probably has to work in the basement. Does that suck? Another big thing, they would have to pay me to get a commercial high speed internet because residential internet simply sucks at work. By the way, when I was WFH, I broke 2 test boards just because no hardware people around me to support...
Honestly, it's silly demands like these that ruin it for the rest of us. You might not appreciate working from home but a lot of us love it. Part of your utilities? Do you shut off the power and the heat at home when you go to work? You might turn it down but it doesn't go to zero! As far as high speed internet, my home internet is WAY faster than my office internet. You can get 300/20 cable internet for about $50/month. Your comment about the 2 offices is somewhat valid except that many of us work in cubicles and I suspect that you can easily have just as much space sharing an office for 2 at home that you would have in your cubicle at work. Also, most people have a home office even if they don't work from home so for most, you're not needing extra space, it's just space you might not have used as much before. As far as having to work in the basement, is that really worse than most offices? More importantly, as mentioned, there are huge cost savings and benefits from working from home: parking. I work downtown and pay $245/month for parking (and I consider myself lucky it's not more). That alone is way more than the extra cost in utilities. Gas : I wouldn't be surprised if the average person spends at least $50/week ($200/month in case commuting to work but even if it's half that, that's still $100/month not to mention the wear on the vehicle. If you don't drive, you likely have a bus pass so that's still $100+/month. Food / coffee / etc is way more expensive if you work in an office than if you just make lunches / snacks / coffee in your kitchen. And the biggest for me is the time; I have a relatively short commute (maybe 25 minutes in the morning and probably 35 minutes in the evening) but that's still at least an hour of my day spent in the car getting to / from work and I'd much rather spend that time at home.
Member
May 6, 2012
250 posts
144 upvotes
KANATA
michelb wrote: Honestly, it's silly demands like these that ruin it for the rest of us. You might not appreciate working from home but a lot of us love it. Part of your utilities? Do you shut off the power and the heat at home when you go to work? You might turn it down but it doesn't go to zero! As far as high speed internet, my home internet is WAY faster than my office internet. You can get 300/20 cable internet for about $50/month. Your comment about the 2 offices is somewhat valid except that many of us work in cubicles and I suspect that you can easily have just as much space sharing an office for 2 at home that you would have in your cubicle at work. Also, most people have a home office even if they don't work from home so for most, you're not needing extra space, it's just space you might not have used as much before. As far as having to work in the basement, is that really worse than most offices? More importantly, as mentioned, there are huge cost savings and benefits from working from home: parking. I work downtown and pay $245/month for parking (and I consider myself lucky it's not more). That alone is way more than the extra cost in utilities. Gas : I wouldn't be surprised if the average person spends at least $50/week ($200/month in case commuting to work but even if it's half that, that's still $100/month not to mention the wear on the vehicle. If you don't drive, you likely have a bus pass so that's still $100+/month. Food / coffee / etc is way more expensive if you work in an office than if you just make lunches / snacks / coffee in your kitchen. And the biggest for me is the time; I have a relatively short commute (maybe 25 minutes in the morning and probably 35 minutes in the evening) but that's still at least an hour of my day spent in the car getting to / from work and I'd much rather spend that time at home.
I am just speaking for myself. I commute 7 minutes one way. The money saved by WFH is nothing compared to my income. I love the old way. My company will go back to the old way. Also, company owns the office property on the corner of March and Terry fox. I think the property has appreciated big time since they have owned it for long time. So they actually earn money by having an office.
Jr. Member
Oct 21, 2007
113 posts
35 upvotes
As someone who's worked at remote companies for the past 6 years, I think people are over-estimating how much things will change. There will no doubt be a trough of disillusionment for remote work. I think a lot of companies that are deciding to work remotely permenantly may have second thoughts as the pandemic passes. I also think the impact on real estate (both commercial and residential) may not be as great as some people are thinking.

Remote workforces are great when you have mostly experienced people and a clear direction that everyone is behind without a ton of course correcting, and work that lends itself to a high degree of autonomy (software development on an established project with experienced team members fits well into this). When you need to make big directional decisions, get people on board, launch projects, etc - remote tools still don't replace getting together in person. You can do it remotely, but it will be much slower. Remote-first companies spend more money on travel and team meetings than collocated ones. The remote tech company I'm part of used to fly all of their engineers to meet in person 3 times per year. Day to day virtual meetings are fine, big direction setting meetings are still better in person, even with all of the latest tooling. I can imagine there are a lot of jobs where in person meetings will still be important.

There's also a big social aspect people are ignoring. This is why companies like WeWork exist, basically renting real estate to small companies that would be 100% remote, but want real office space. Even though I only work with remote workers, I'd still go into our local office to catch up with my coworkers on side things. I have done this less over the past year, and miss it greatly. There are also some people who are not cut out for working from home, and do require the structure of a 9-5 office to be productive.

Shopify in particular I think will be interesting to watch, because they've invested a lot into their physical real estate - including open office spaces and collaboration spaces. They've long been big on collaboration and mentoring - hiring junior staff and providing "10 years of experience in 1 year". I think it will be a major challenge to implement that model with a fully remote work force. Most of the remote-only companies I see hire primarily experienced team members for established projects. I don't think Shopify would have gotten where they are today if they had started as "remote-first", but at this stage of growth it may help them. I think companies aiming to disrupt will always benefit from collocation (hence Silicon Valley isn't going anywhere).

That said - as companies adapt (government is the biggest question), I do think there will be fewer trips into downtown. Some meetings will still be done best in the office (where collaboration is involved). The smart ones will still ensure their employees are getting together to socialize and discuss things in person. I think some companies will have more shared offices, collaboration spaces and less dedicated offices. This will have some impact, though I'm not sure it'll be transformative.

There's a dark side to remote work as well, that I worry about if companies view it more as a cost saving measure. It's not uncommon for foreign companies to hire contractors as remote "employees", skirting labour laws. As welcomelm pointed out, as a remote employee, your employer should indeed reimburse you for your office expenses - up to equivalent rent if you need to buy/rent a larger place for a home office. At my company, this is something some employees have negotiated. Not everyone has office space to effectively work remotely, and where they don't, the company should foot the bill. Note that there are some tax write offs for remote employees that don't live near an office as well.

For residential real estate, I'm not sure how much this will impact things. If people were already willing to live in the middle of nowhere and spend hours commuting, they'll be even more likley to live in the middle of nowhere now. I think people who live downtown like to live there to be in the middle of things, and being close to work is just a bonus. Likewise for commercial, I don't think going to restaurants, shops and malls has been primariily about purchases for a long time - more the experience, where purchases may happen. No doubt many businesses won't survive, but I think they'll be replaced over time as people starting heading out again. Personally, I can't wait to get out again.

Interesting times, but I think people always over-estimate how much things will change after market corrections.
Deal Addict
Dec 23, 2010
1841 posts
901 upvotes
Moon
welcomelm wrote: If company asks me to WFH, I would ask them to pay part of the utilities that I used at home; I would ask them to compensate me using my home as office, what if I don't have that space? If my couple is WFH too, I have to set up 2 offices at home, which means one of us probably has to work in the basement. Does that suck? Another big thing, they would have to pay me to get a commercial high speed internet because residential internet simply sucks at work. By the way, when I was WFH, I broke 2 test boards just because no hardware people around me to support...
Unfortunately for you many people are not so needy.
Member
May 6, 2012
250 posts
144 upvotes
KANATA
Applesmack wrote: Unfortunately for you many people are not so needy.
People are always needy. You would just have to be in that position to be able to negotiate. You don't see office clerk negotiate do you? Talking about needy, you would have to talk to canadapost and ontario teachers first.
Deal Addict
Jan 15, 2017
3523 posts
2876 upvotes
welcomelm wrote: I guess I am a little different. My house is 2200 sqft with only one office and my wife takes it. I have to work on the dining table with son facing me from the other end. Without pandemic, I drive 6/7 minutes to work, my son's school and daycare are all within 10 minutes. Also I do have the emotional need to be in touch with real people instead of cold machines everyday. I am happy with things used to be.
Your post hits home a point I made earlier. WFH is not working on the dining room table. If more and more companies institute WFH, employees may start looking for homes that will accommodate private and secure work places in their homes.

I understand the social need that work provides. We won't know though until after we return to the office whether that need can be met with social distancing and disinfecting procedures that will be in place.
Member
Nov 10, 2014
332 posts
397 upvotes
Ottawa, ON
WFH thing aside, it looks like prices are coming back in Ottawa. I am looking at recent sold prices in Barrhaven and Kanata and they seem pretty much indistinguishable from precovid levels.
Member
Jan 29, 2020
309 posts
329 upvotes
Tadalafil wrote: WFH thing aside, it looks like prices are coming back in Ottawa. I am looking at recent sold prices in Barrhaven and Kanata and they seem pretty much indistinguishable from precovid levels.
I haven't looked but pretty sure volume has collapsed though. Market is like Wile E Coyote running off a cliff, he stays suspended for a second. Renters who lose their jobs will stop paying rent when the CERB ends. It will happen all of a sudden and you will see forced sales from all the highly-levered speculators who cannot float mortgages for a long time. However, there will be more demand on the tenant side if CMHC jacks up the required downpayment to 10%.

If you look on kijiji you will see quite a few pictures of townhouses bought by speculators, in a state of 90% completion. These units have been advertised for a long time, with periodic price drops because the speculator is getting worried. If no tenant is found, he will be desperate to find someone to offload it to because otherwise he has to close and suffer heavy carrying costs for an unknown amount of time. This is in an environment where the economists working for the CMHC, who are backstopping all the uncreditworthy people and has maybe the most skin in the real estate game in the country, are projecting double digit percentage price declines in the coming years. So there will be no profitable exit for years for the speculator, his best move is to exit early and cut his losses.
Member
May 6, 2012
250 posts
144 upvotes
KANATA
Cashforlife wrote: I haven't looked but pretty sure volume has collapsed though. Market is like Wile E Coyote running off a cliff, he stays suspended for a second. Renters who lose their jobs will stop paying rent when the CERB ends. It will happen all of a sudden and you will see forced sales from all the highly-levered speculators who cannot float mortgages for a long time. However, there will be more demand on the tenant side if CMHC jacks up the required downpayment to 10%.

If you look on kijiji you will see quite a few pictures of townhouses bought by speculators, in a state of 90% completion. These units have been advertised for a long time, with periodic price drops because the speculator is getting worried. If no tenant is found, he will be desperate to find someone to offload it to because otherwise he has to close and suffer heavy carrying costs for an unknown amount of time. This is in an environment where the economists working for the CMHC, who are backstopping all the uncreditworthy people and has maybe the most skin in the real estate game in the country, are projecting double digit percentage price declines in the coming years. So there will be no profitable exit for years for the speculator, his best move is to exit early and cut his losses.
Your statement is only true when the market is highly speculated, which is not the case for ottawa. Most buyers in Ottawa are still purchasing to living in.

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