Real Estate

Ottawa Real Estate market discussion

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  • Nov 25th, 2020 12:39 am
Jr. Member
Mar 29, 2016
139 posts
94 upvotes
Toronto
Thanks for feedback @Mrperson
Sales lady mentioned that 1st rental tower will be built, then the condo (Claridge Royal) and later the 2nd rental tower will be built. They will come in phases to make sure they do not compete with each other from rental prospective.
A grocery store (Metro) will be built which is always a plus point.
I do not mind closing something further out in 2023-2024, and let the value of the property go up without hassle of a mortgage right now.
Only concern is the location, did not find the area to be attractive now due to few homeless shelters around (salvation army on George St, shepherds of good hope on King Edward, Ottawa mission closer to Rideau/Waller st).
Most of the employment (govt offices) are in downtown west side between Elgin & Bronson st.
Not sure how attractive this area will be from investment prospective.
Newbie
Jun 14, 2020
17 posts
4 upvotes
casanova2001 wrote: Thanks for feedback @Mrperson
Sales lady mentioned that 1st rental tower will be built, then the condo (Claridge Royal) and later the 2nd rental tower will be built. They will come in phases to make sure they do not compete with each other from rental prospective.
A grocery store (Metro) will be built which is always a plus point.
I do not mind closing something further out in 2023-2024, and let the value of the property go up without hassle of a mortgage right now.
Only concern is the location, did not find the area to be attractive now due to few homeless shelters around (salvation army on George St, shepherds of good hope on King Edward, Ottawa mission closer to Rideau/Waller st).
Most of the employment (govt offices) are in downtown west side between Elgin & Bronson st.
Not sure how attractive this area will be from investment prospective.
My opinion is that if you want to invest in downtown condos, you can’t think like a suburbanite. (I say this with plenty of respect for suburbanites!) the area of royale is becoming condo central, and more condos will attract more young wealthy people, which will attract more restaurants, bars, gyms and amenities which will add energy and value to the area. The people who want to live there likely will not own cars and if they work in offices they will be very close to train. They will live there for the lifestyle. People who come to Ottawa from Toronto and mtl yearn for a walkable livable “cool” district. I agree it’s nice that the completion date is so far in the future as it will likely appreciate without the hassle of a mortgage. Nothing is risk free but I’d say it’s a risk worth taking.
Newbie
Sep 27, 2020
4 posts
1 upvote
casanova2001 wrote: Claridge Royal price list attached.. It’s in pre-construction stage with completion around mid 2024.

Any one purchase in this project and what you guys think for buying one-bedroom for investment purpose?
Location: Cumberland and George.

There is a Salvation Army Ottawa Booth Centre right around the corner of Claridge Royal. Sales lady said they will be moving it to Vanier in future but not confirmed.

Any suggestions?
My understanding is they are not moving to Vanier but that will be a new facility. I wouldn't count on a change in the environment anytime soon. It's par for the course there. That will add a lot of condo inventory but it seems to be absorbable especially when students and immigrants return. The market for condos has been very resilient despite the Covid related challenges. How much appreciation you will get in pre-construction over the next few years is another question.
Newbie
Sep 29, 2013
75 posts
41 upvotes
Cashforlife wrote: If not positive cashflow, what you are doing is called "speculation." If you have positive cashflow, taking into account vacancies, furnace replacement, roof replacement, you can ride out a downturn for a long time, almost forever.

Also, when you go to renew the mortgage on an investment property, or you want to buy another "door," it is very helpful to be able to show the bank that you are making money.
TD takes your yearly rental income minus mtg payments for the year then subtract 20%.
If your ratio is over 120% they reject you.
Scotia is the worst in that they subtract 50%.

So keep this in mind when buying subsequent rental properties.
Deal Fanatic
Jul 4, 2004
5699 posts
1759 upvotes
Ottawa
AddictRC wrote: TD takes your yearly rental income minus mtg payments for the year then subtract 20%.
If your ratio is over 120% they reject you.
Scotia is the worst in that they subtract 50%.

So keep this in mind when buying subsequent rental properties.
I think it depends on the branch, load officer, etc. We deal with TD and I'm pretty sure our branch onlys consider 50% of rental income
Member
Feb 7, 2018
248 posts
314 upvotes
Cashforlife wrote: If not positive cashflow, what you are doing is called "speculation." If you have positive cashflow, taking into account vacancies, furnace replacement, roof replacement, you can ride out a downturn for a long time, almost forever.

Also, when you go to renew the mortgage on an investment property, or you want to buy another "door," it is very helpful to be able to show the bank that you are making money.
This is not necessarily correct. You only need to cover Mortgage Interest, Maintenance, Insurance, and Property Taxes with a slight contingency for vacancy.

You can have negative cashflow but still be paying down the principal portion of your mortgage, hence making the overall returns positive before equity gains are factored in.

True equity speculation would be having the property rent for less than the operating costs + interest portion of mortgage.
Deal Addict
User avatar
Jul 19, 2005
3522 posts
940 upvotes
Ottawa
In the last month, I've put down 3-4 offers in the Carelton Heights/Fisher Glen area, all at least 30K - 50K above asking. Last Friday, I put an offer on a house listed at $680 in Carelton heights and they ended up with 8 offers. My initial offer was $750K, suggested by my realtor based on sold the prices in the last month for that area. 3 buyers all had the same offer of $750k, including myself. So I'm thinking someone may drop out and someone else will put in an additional $5k to $10k more, I went in at $765k, $85k above asking. My realtor called and said my offer and someone else's was at $765k, the seller ended up tossing a coin and I lost out. I've lost all drive and motivation to find a house in this market. I have always said location first (I want to be close to Dow's Lake) but I may need to settle and just live in Avalon/Nottinggate/Chapel Hill South. I was hoping to find a place before winter
Deal Guru
User avatar
Jun 28, 2003
10120 posts
3224 upvotes
Ottawa
shadow_cruiser wrote: In the last month, I've put down 3-4 offers in the Carelton Heights/Fisher Glen area, all at least 30K - 50K above asking. Last Friday, I put an offer on a house listed at $680 in Carelton heights and they ended up with 8 offers. My initial offer was $750K, suggested by my realtor based on sold the prices in the last month for that area. 3 buyers all had the same offer of $750k, including myself. So I'm thinking someone may drop out and someone else will put in an additional $5k to $10k more, I went in at $765k, $85k above asking. My realtor called and said my offer and someone else's was at $765k, the seller ended up tossing a coin and I lost out. I've lost all drive and motivation to find a house in this market. I have always said location first (I want to be close to Dow's Lake) but I may need to settle and just live in Avalon/Nottinggate/Chapel Hill South. I was hoping to find a place before winter
I am surprised the seller didn't want to ask you (or the eventual buyer) if anyone could do better, rather than just flipping a coin.

Do you know if your offer and the other offer were on par, in terms of closing date and no conditions?
[removed]
Sr. Member
Oct 13, 2011
759 posts
486 upvotes
Cashforlife wrote:
Fundamentally, the economic value of a dwelling is related to how much rent it can generate. It's also a function of median income. If the rent can't cover the expenses, or if houses are a high multiple of average income, it is a pretty clear indication that something is out of whack. There is a reason the CMHC and banks are increasing loss provisions.
I found this to be incredibly funny as this never happens in the real world, especially in bigger cities like Toronto or Vancouver. I feel sorry for those who believe in this as they would have been priced out while their friends and families net worth goes through the roof.
Member
Apr 18, 2017
481 posts
210 upvotes
Ottawa
casanova2001 wrote: Claridge Royal price list attached.. It’s in pre-construction stage with completion around mid 2024.

Any one purchase in this project and what you guys think for buying one-bedroom for investment purpose?
Location: Cumberland and George.

There is a Salvation Army Ottawa Booth Centre right around the corner of Claridge Royal. Sales lady said they will be moving it to Vanier in future but not confirmed.

Any suggestions?
That's a complete lie, and the sales people should be called out for that. They're now building 70 beds in Vanier + supportive housing, but "keeping its addictions services at its Booth Centre in the ByWard Market"

In other words, it will remain a sketchy area
Sr. Member
Oct 13, 2011
759 posts
486 upvotes
Cashforlife wrote: The price-to-rent metric is quite widely used. In the USA, it's around 110% right now. Just before the most recent housing crash in the USA, it was 114%. In Canada, we're around 125% - in the 80th percentile globally.

Do you figure that real estate just always goes up in Canada? Risk-free investment, in other words? Like Facebook stock?
Sounds great in theory, but reality is those who follow your logic and not buy would have been financially worst off. Just like those who missed out on Tesla.
Sr. Member
Oct 13, 2011
759 posts
486 upvotes
Cashforlife wrote: I admire your confidence. Will you be lining up overnight to buy one of those $1000/sf condos? More risk, more reward...
And I'm sure you could have asked the same question to people who lined up for the $1000/sf condos in Vancouver and Toronto a few years ago. And guess who is worth more now?
Jr. Member
Mar 29, 2016
139 posts
94 upvotes
Toronto
xxxronjames wrote: That's a complete lie, and the sales people should be called out for that. They're now building 70 beds in Vanier + supportive housing, but "keeping its addictions services at its Booth Centre in the ByWard Market"

In other words, it will remain a sketchy area
Thanks,

IMO, Claridge Moon (Lyon LRT) seems better location than Claridge Royale.
Sr. Member
Oct 13, 2011
759 posts
486 upvotes
Cashforlife wrote: Of course. It's well known that real estate offers risk-free rewards. Did anyone make money in the S&P500?

Do you think it's a good sign that the government has extended the wage subsidies and wage replacement programs? Why would they do that if the economy was bouncing back?
And I will be more worry if the government doesn't extend these benefits. Classic case of how Keynesian Economic works. Nursing the economy and keeping the money flowing until the private sectors gets back on its feet. Those who used cheap debt to buy assets will be rewarded when the economy recovers and hyper inflation kicks in as the world drowns with fiat money printed by various governments around the world.
Deal Addict
User avatar
Jul 19, 2005
3522 posts
940 upvotes
Ottawa
canabiz wrote: I am surprised the seller didn't want to ask you (or the eventual buyer) if anyone could do better, rather than just flipping a coin.

Do you know if your offer and the other offer were on par, in terms of closing date and no conditions?
My offer was $765k with no conditions and closing date which the seller choose (November 30). The other offer was $765k but I'm not sure what they went with for closing date and conditions. I believe they already did a pre-inspection.

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