Ottawa and Surrounding Area Real Estate market discussion

cyberfreak123 wrote: ↑ I like detached bungalow in mature neighborhoods with good transit. I'd say 450K or cheaper if you can find it, but it'll likely require some work. But you can find semis for cheaper. I convert the basement into a legal basement unit. When the units looks modern and clean, I have no problem attracting decent tenants. But you can find already built basement unit as well. If you buy right, it's good cashflow. As which neighborhood, I like convenient access to universities (Ottawa U or Carleton U), colleges (Algonquin), close to hospitals ,close to the LRT.
I like multifamilies for their strong and stable income but they're crazy expensive, unless you go to Gatineau...

Unless you buy / convert the single family residences to multiple units, I think it's hard to make money, for a detached single family 3 or 4 bedroom, I think you are looking at least $450k-600k pretty much anywhere in the city and I think you'd be hard pressed to get more than $2500-$3000 per month in rent (from my observations, I think the rental market is pretty much non-existant above that despite it being very strong below $2500). At those prices, I just don't think the returns are really worth it once you factor your holding cost, expenses and return.

Hintenburg is changing. My son lives here with two others (and his dog). Listed last Wednesday, one- hour of showings on Thursday, and apparently now sold.

Tear-down on a double lot, $899,999! Assume the landlord got close to or = asking.

https://www.century21.ca/Property/ON/K1 ... 1421049454

OttawaGardener wrote: ↑Hintenburg is changing. My son lives here with two others (and his dog). Listed last Wednesday, one- hour of showings on Thursday, and apparently now sold.

Tear-down on a double lot, $899,999! Assume the landlord got close to or = asking.

https://www.century21.ca/Property/ON/K1 ... 1421049454

What was the work order issue that the buyer needed to address with the city? Found that a bit curious in a $900K listing.

BigDurian wrote: ↑ What was the work order issue that the buyer needed to address with the city? Found that a bit curious in a $900K listing.

I wondered that too. My son doesn't know, in fact he wasn't aware the property was to be up for sale until the sign went up. To me it would have been a courtesy of the landlord to give a heads up.

OttawaGardener wrote: ↑ Hintenburg is changing. My son lives here with two others (and his dog). Listed last Wednesday, one- hour of showings on Thursday, and apparently now sold.

Tear-down on a double lot, $899,999! Assume the landlord got close to or = asking.

https://www.century21.ca/Property/ON/K1 ... 1421049454

If this is a full 80 X 100 lot that is a good price. Easily put 4 units in there that will sell for $950k each. $450k for a tear down lot is good and having two next door is even better (plus only one house to tear down).

michelb wrote: ↑ Honestly, I kind of disagree that Ottawa rentals are that good for investors. Although there's a very strong demand for rentals in the city and rental prices have gone up quite a bit, given the real estate prices, I don't think there's huge profits to be made. There is profit to be made but I suspect factoring the opportunity cost (i.e. whatever you have in the rental property you could invest elsewhere and get decent returns) and the work involved in having rentals, personally I think you can probably do better than buying rentals. I do agree that you can make more money with cheaper / less desirable properties.

FWIW, I own 2 rental apartments (actually 3 but 1 is rented to my in-laws at a low rent so I don't really count that one) and both are cash positive but we bought both when prices were quite a bit lower. We've owned 1 for about 18 years, over that time, it's appreciated maybe 50% and until a few years ago, we simply had it in the rental pool and it was cash negative. The second we bought about 3 years ago as a "handyman special" so the price was quite low and it has appreciated quite a bit in the last few years. We were renting both on AirBnb which was quite profitable (although certainly more work) but the condo board has since banned short term rentals so we had to stop that. We still do well with the rentals because we rent fully furnished, all-included for 6 months and I think we've managed to find a niche market (I think we rent for at least 50% more than the rental pool rents but we do have more costs).

Thanks a lot for the detailed explanation, I'm still learning things in Canada as a new comer, so what will be the other investment options to get decent returns. We both wont have any pension once we retire, so we are scared when thinking about our retirement. What will be our best option to multiply our money ?

MK1986 wrote: ↑ Thanks a lot for the detailed explanation, I'm still learning things in Canada as a new comer, so what will be the other investment options to get decent returns. We both wont have any pension once we retire, so we are scared when thinking about our retirement. What will be our best option to multiply our money ?

Passive index based investing is the gold standard, coupled with maximizing the benefit of tax advantaged accounts such as RRSP and TFSA.
Best place to start is the link below.
https://canadiancouchpotato.com/

Tadalafil wrote: ↑ Passive index based investing is the gold standard, coupled with maximizing the benefit of tax advantaged accounts such as RRSP and TFSA.
Best place to start is the link below.
https://canadiancouchpotato.com/

I would have to agree with that. I'm not saying that you shouldn't invest in real estate (obviously I see some value since I'm doing it), I'm just not convinced that now is the time given the current RE prices in Ottawa.

I'm sharing this report in case anyone wants to know better the rental market in Ottawa. It was done recently, March 15th, 2019

City of Ottawa Rental Market Analysis.
https://documents.ottawa.ca/sites/docum ... RMA-en.pdf

This post have been quite for a while, let's the discussion begin again.

Statistics from Ottawa real estate board:

Sizzling Summer Continues into August

September 5, 2019
Members of the Ottawa Real Estate Board sold 1,731 residential properties in August through the Board’s Multiple Listing Service® System, compared with 1,581 in August 2018, an increase of 9.5 per cent. August’s sales included 1,300 in the residential-property class, up 9.7 per cent from a year ago, and 431 in the condominium-property category, an increase of 8.8 per cent from August 2018. The five-year average for August unit sales is 1,522.
“August’s ten percent increase in unit sales from 2018 is over twice the percentage increase experienced last year and three times higher than the previous August,” reports Dwight Delahunt, Ottawa Real Estate Board President. “However, although the numbers are up, Ottawa continues to undergo issues with inventory as the limited supply persists.”
August’s average sale price for a condominium-class property was $308,781, an increase of 11.5 per cent from last year while the average sale price of a residential-class property was $484,921, an increase of 11.8 per cent from a year ago. Year to date figures show an 8.4 per cent and 7.9 per cent increase in average sale prices for residential and condominiums respectively. *
“Year to date average prices, which are more reliable indicators than monthly average prices, show steady, reasonable, and sustainable increases. We don’t anticipate there will be a major correction in the foreseeable future,” Delahunt maintains.
The $350,000 to $499,999 price range was the most prevalent price point in the residential market, accounting for 42 per cent of August’s transactions while 27 per cent of residential sales were in the $500,000 to $749,999 range. The most active price point in the condominium market has increased again in 2019 to $250,000-$399,999, accounting for 50 per cent of the units sold.
“As to be expected, now that the units in the lower end of the condo market have been acquired, there appears to be another upward movement in the prices of available condominiums,” Delahunt points out. “Statistics show the higher end of the residential market has picked up with the doubling of unit sales in the $750K to $1M price range from this time last year,” he adds.
When questioned about the government’s First-Time Home Buyer Incentive (FTHBI) which came into effect on September 2, Delahunt cautions, “It’s too early to tell what the impact will be or if there will be any impact in Ottawa’s market – these measures are not helping the supply side. We continue to call on all three levels of government to implement actions to increase supply which will facilitate restoring balance to our local real estate market.”
“Coming into the fall months, which are typically busy, we expect the market will continue to pick up steam,” he speculates. “Your home purchase or sale is not a DIY project; there’s too much at stake. Be sure to find a local REALTOR® with the depth of knowledge and experience that is warranted in one of the biggest investments you will make in your life.”
In addition to residential sales, OREB Members assisted clients with renting 1,906 properties since the beginning of the year.

The stats are always interesting to see but again, like last month, they highlight what they want

michelb wrote: ↑ It's always interesting to see the stats but what's also interesting is what they don't say:

June 2019:
Avg condo : $308,842, avg residential : $500,716
July 2019:
Avg condo : $299,655, avg residential : $487,308

So there's been a fairly significant drop (close to 3%) across the board in July ...

(from https://www.oreb.ca/newsroom/condo-sale ... le-market/)

Aug 2019:
Avg condo : $308,781, avg residential : $484,921

so while condo has basically jumped back to July prices, residential has dropped another 0.5% or so.

(Condo average tends to fluctuate a lot more since you can get a condo for under < $100k and you can probably find one for > $1 mil so a few more on either end really skews the average),

Anyone know of good resources for getting info. on smaller markets like Prescott, Casselman, Cornwall, etc.? Do they all have separate real estate boards and separate pool of agents? I'm eyeing towns outside of Ottawa as Ottawa is becoming unattractive from cashflow perspective.

Does anyone have recommendation on a real estate tax accountant in Ottawa? I would like to seek advice on the case where son name on the mortgage with parents on 2 properties, personal vs incorporated, etc.

michelb wrote: ↑ The stats are always interesting to see but again, like last month, they highlight what they want



Aug 2019:
Avg condo : $308,781, avg residential : $484,921

so while condo has basically jumped back to July prices, residential has dropped another 0.5% or so.

(Condo average tends to fluctuate a lot more since you can get a condo for under < $100k and you can probably find one for > $1 mil so a few more on either end really skews the average),

That matches what I have seen in the markets I watch. Looking backwards there seems to have been a hard break in June where the market lost momentum. Was it people starting to worry about the election? I am surprised I think the fundamentals are still good especially for houses in central and or LRT areas. The condo market really froze up. Sellers think they can get more than buyers are willing to pay. I have seem some identical units listed for wildly divergent prices. There is lots of inventory as sellers were holding off for years in listing their places.

fogetmylogin wrote: ↑ That matches what I have seen in the markets I watch. Looking backwards there seems to have been a hard break in June where the market lost momentum. Was it people starting to worry about the election? I am surprised I think the fundamentals are still good especially for houses in central and or LRT areas. The condo market really froze up. Sellers think they can get more than buyers are willing to pay. I have seem some identical units listed for wildly divergent prices. There is lots of inventory as sellers were holding off for years in listing their places.

I thought it was more or less normal that everything slows down in the summer? Since many people are away in the summer, and that's why spring is so busy (families don't want to move during the school year so with a typical 60-day period between sale date and close date, buying in summer is often too late for them).

So I don't necessarily think this is any indication that the market is weakening, it's just an expected pattern that happens every year and may not have anything to do with the election (though I could be wrong!). I think we'll have to wait till next spring to see if the "hot" market continues or if there really is a slowdown in the price increases we saw earlier this year.

I have spent some time to visit few sale centres in the South and East of Ottawa last weekend, I am surprise that the townhouses are still pretty well. A normal sized townhouse (around 1800 sq ft) are now around low-mid 400k in the South while they are around low 400k in Orleans. Most of the townhouses are sold out except for few bad lots are still available. The demand of townhouse are still very high, just wondering when does it going to slow down.

jk9088 wrote: ↑ I thought it was more or less normal that everything slows down in the summer? Since many people are away in the summer, and that's why spring is so busy (families don't want to move during the school year so with a typical 60-day period between sale date and close date, buying in summer is often too late for them).

So I don't necessarily think this is any indication that the market is weakening, it's just an expected pattern that happens every year and may not have anything to do with the election (though I could be wrong!). I think we'll have to wait till next spring to see if the "hot" market continues or if there really is a slowdown in the price increases we saw earlier this year.

Partly true but previous three years had strong late summer early fall.

This is the monthly stats that I'm mostly interested in.
The month of inventory for both houses (2.1) and condos (1.4) is still very low.
condos should sell very well.

Fall should be still a hot season, unless a big number of new listings flood the market.

https://www.hometeamottawa.com/stats/

fogetmylogin wrote: ↑ Partly true but previous three years had strong late summer early fall.

cyberfreak123 wrote: ↑ This is the monthly stats that I'm mostly interested in.
The month of inventory for both houses (2.1) and condos (1.4) is still very low.
condos should sell very well.

Fall should be still a hot season, unless a big number of new listings flood the market.

https://www.hometeamottawa.com/stats/

As you can see in the link cyberfreak123 just posted prices seem to always drop off a bit after around June / July and then it climbs back up a bit

This topic stresses me out but I have to keep reading :-(