Real Estate

Ottawa and Surrounding Area Real Estate market discussion

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  • Jan 21st, 2021 7:27 am
Deal Fanatic
Jul 4, 2004
5863 posts
1921 upvotes
Ottawa
Tadalafil wrote: There are exactly 1600 listings right now for Ottawa on Realtor.ca. Looking forward to what sales number and price number come in for October.
The pace of price gains don't seem to reflect the number of listings and MOI, which are unbelievably low.
I do agree that the number of listings is low but to be fair, the avg is around 1700-1800 for October (and 1400-1500 for November) so it's not that far off the average. It's 5-10% below average, not 30% or 50% below average.

(source : monthly numbers from https://www.hometeamottawa.com/stats/)
Deal Addict
Dec 4, 2016
1867 posts
888 upvotes
October stats are out:
https://www.oreb.ca/newsroom/octobers-w ... le-market/

1607 sales. Would be interesting to see what MOI looks like when hometeamottawa publishes inventory numbers.
Average condo prices up significantly YOY. Based on personal anecdotal evidence, this 18% price could be real, rather than a change of sales mix. Basically condos in Ottawa stay flat for a decade, and then suddenly jumped 20% over a few months.
Deal Fanatic
Jul 4, 2004
5863 posts
1921 upvotes
Ottawa
BlueSolstice wrote: October stats are out:
https://www.oreb.ca/newsroom/octobers-w ... le-market/

1607 sales. Would be interesting to see what MOI looks like when hometeamottawa publishes inventory numbers.
Average condo prices up significantly YOY. Based on personal anecdotal evidence, this 18% price could be real, rather than a change of sales mix. Basically condos in Ottawa stay flat for a decade, and then suddenly jumped 20% over a few months.
In case anyone is following this,

Thanks for the stats. Here are the month-to-month changes:

June 2019 - Avg condo : $308,842, avg residential : $500,716
July 2019: - Avg condo : $299,655, avg residential : $487,308
Aug 2019: - Avg condo : $308,781, avg residential : $484,921
Sept 2019: - Avg condo : $309,373, avg residential : $487,438
Oct 2019: - Avg condo : $319,208, avg residential : $483,405

So condo avg is now up about 3.0% and residential avg is still down about 3.5% from the peak in June 2019

Obviously these are averages so not indicative of the actual market (e.g. it could be homes / condos that are smaller / worth less that are selling for those amounts).
Sr. Member
Aug 6, 2011
590 posts
261 upvotes
Members of the Ottawa Real Estate Board sold 1,607 residential properties in October through the Board’s Multiple Listing Service® System, compared with 1,375 in October 2018, an increase of 16.9 per cent. October’s sales included 1,211 in the residential-property class, up 15 per cent from a year ago, and 396 in the condominium-property category, an increase of 23 per cent from October 2018. The five-year average for October unit sales is 1,319.

“New listings are down, inventory remains scarce, and yet more homes changed hands this October than in the past decade and a half,” reports Dwight Delahunt, President of the Ottawa Real Estate Board. “It’s perplexing at first; however, when you consider the current breakneck transaction pace in the Ottawa resale market, often requiring homebuyers and sellers to make swift decisions, it makes sense.”

“October’s average Days on Market (DOM) for residential properties decreased by 10 days to 33 days, and the DOM for condominiums decreased to 28 days from the average 47 days experienced this time last year. Year to date figures show 31 DOM (down 8 days) for residential properties and 35 DOM (16 fewer days) for condominiums. Products are flying off the shelves, so to speak.”

October’s average sale price for a condominium-class property was $319,208, an increase of 18.3 per cent from last year while the average sale price of a residential-class property was $483,405, an increase of 7.6 per cent from a year ago. Year to date figures show an 8.3 per cent and 9.1 per cent increase in average sale prices for residential and condominiums, respectively.*

“We are seeing slightly above-average climbs in home prices this year, and the equity in many properties is undoubtedly increasing, which is great news for homeowners. Still, the growths are reasonable considering the state of the market and Ottawa retains its reputation of being one of the country’s most affordable cities where residents can enjoy a high quality of life,” Delahunt acknowledges.

The most active price range in the condominium market was $225,000-$349,999, accounting for 53 per cent of the units sold while $350,000 to $499,999 represented the most prevalent price point in the residential market, accounting for 43 per cent of October’s transactions. Residential properties in the $500,000 to $749,999 range increased to 30 per cent of all residential resales.

“We are noticing a significant uptick in residential properties sold in the $500-750K price range. This price point now represents almost 1 in every 3 home sales.”

“Even though there are incidences of multiple offers and homes sold for over market value, the reality is that approximately 36% of homes are selling over asking, compared to 21% at this time last year. It is a phenomenon that is affecting specific pockets of the city, but certainly not every neighbourhood or property type.”

“Sellers should use the knowledge of a REALTOR® to understand the complexities of their home’s positioning. Buyers require timely guidance on how to put in an attractive offer in this fast-paced market — and both parties must understand the intricacies of the contracts they are signing,” Delahunt advises.

In addition to residential sales, OREB Members assisted clients with renting 2,334 properties since the beginning of the year.
Deal Fanatic
Jul 4, 2004
5863 posts
1921 upvotes
Ottawa
William W wrote: https://www.cbc.ca/news/canada/ottawa/o ... -1.5349027

Wonder if this would put a small ding to the sentiment of people buying property as investment.
I don't think it's it will have a big impact (as much as you hear about it in the media, I think short-term-rentals are a pretty insignificant portion of rentals) but I do think it will have an effect.

We've been considering getting another income property but it would likely be to do short-term-rentals. From my experience, although it's more work, you certainly get a better return doing STR and I find the tenants are better and it's easier to stay on top of damage and maintenance. Long-term tenants tend not to care about leaving damage and you typically only find out about it when they move out so you might only get to see / inspect the property every couple of years. You also have a lot more control over tenants with STR. A ban on STRs for non-primary house would likely affect our decision to buy.

FWIW, we have 2 apartments that we used to do STR with (until the condo board banned STR) and I also rent out my parents lake house (which they will be selling and really because it's seasonal only, the return wasn't worth it).
Last edited by michelb on Nov 6th, 2019 9:59 am, edited 1 time in total.
Deal Addict
Dec 4, 2016
1867 posts
888 upvotes
michelb wrote: Stats here were updated : https://www.hometeamottawa.com/stats/
Freehold MOI 2.0, while condo MOI at 1.3. Definitely a hot market, but hopefully not hot enough to attraction provincial government attention and the introduction of another housing tax, foreign buyer or not. The relative calm on the high end detached segment probably helps with the MOI number.
Deal Addict
Dec 4, 2016
1867 posts
888 upvotes
William W wrote: https://www.cbc.ca/news/canada/ottawa/o ... -1.5349027

Wonder if this would put a small ding to the sentiment of people buying property as investment.
Maybe downtown core, but probably not suburbs. AirBnB is never all that big in Ottawa. Of all the things governments can do to show they care about affordable housing, restrictions on AirBnB would probably have the least impact on RE prices.
Deal Addict
Nov 13, 2013
2368 posts
1155 upvotes
Ottawa
BlueSolstice wrote: Maybe downtown core, but probably not suburbs. AirBnB is never all that big in Ottawa. Of all the things governments can do to show they care about affordable housing, restrictions on AirBnB would probably have the least impact on RE prices.
Yes zero in suburbs though close suburbs like Glebe have decent sized AirBnB market. In the Byward Market I think it could have a significant impact. A few buildings have lots of units and some of the houses towards the north are also used for AirBnb. If people decide to sell or rent long term that should have an impact. In genera the Byward market is on the decline vs Westboro, Centretown and especially Landsdowne.
Sr. Member
Aug 14, 2007
524 posts
281 upvotes
Ottawa
Most likely, the year-over-year increase will be around 8%-9% in 2019. I wonder what is growth rate for next year? especially the Spring 2020. Due to the ultra low inventory, I expect another 5%-10% in 2020. Which types of properties will gain the most? It is normal to see a standard townhouses are now around $450k range (from low 400's in Orleans, mid 400's in Barrhaven to high 400's in Kanata). Are we expect the see townhouses keep growing? Look back to 2012-2016, there are LOTS of condos stay in the market. It is because builders are over-built back in 2009-2011. Are we going to see the same things for townhouses? since builders are rushing to push townhomes to the market and an ocean of townhouse will be available in summer 2020-2021.

Do you think condo market will be the next wave of increase? check out Oct 2019 data, there are no much condo inventory in the market.

Oh well, I just throw out a list of questions, let's discuss....
Deal Addict
Dec 4, 2016
1867 posts
888 upvotes
audiorichard wrote: Most likely, the year-over-year increase will be around 8%-9% in 2019. I wonder what is growth rate for next year? especially the Spring 2020. Due to the ultra low inventory, I expect another 5%-10% in 2020. Which types of properties will gain the most? It is normal to see a standard townhouses are now around $450k range (from low 400's in Orleans, mid 400's in Barrhaven to high 400's in Kanata). Are we expect the see townhouses keep growing? Look back to 2012-2016, there are LOTS of condos stay in the market. It is because builders are over-built back in 2009-2011. Are we going to see the same things for townhouses? since builders are rushing to push townhomes to the market and an ocean of townhouse will be available in summer 2020-2021.

Do you think condo market will be the next wave of increase? check out Oct 2019 data, there are no much condo inventory in the market.

Oh well, I just throw out a list of questions, let's discuss....
Buildings definitely way overbuilt, and Harper's layoffs hit condos particularly hard. For mid-sized cities like Ottawa, condos get hit much harder than freeholds in a downturn. Calgary and Edmonton showed similar things, if I remember correctly.
Keep in mind that a lot of condo projects got converted into rentals, which means you would be competing with institutional landlords with brand new buildings if you intend to rent it out. On the bright side, the increase in construction cost and relative lack of appreciation in condos means it's not all that profitable to build condos, compared to free holds outside greenbelt. On the not so great side, any condo would be eventually competing against freehold towns currently being built. You're basically betting that LRT will be as broken as it is today, and traffic in Ottawa would approach Toronto levels, for middle class government workers to want to squeeze into condos.
Deal Addict
Nov 13, 2013
2368 posts
1155 upvotes
Ottawa
BlueSolstice wrote: Buildings definitely way overbuilt, and Harper's layoffs hit condos particularly hard. For mid-sized cities like Ottawa, condos get hit much harder than freeholds in a downturn. Calgary and Edmonton showed similar things, if I remember correctly.
Keep in mind that a lot of condo projects got converted into rentals, which means you would be competing with institutional landlords with brand new buildings if you intend to rent it out. On the bright side, the increase in construction cost and relative lack of appreciation in condos means it's not all that profitable to build condos, compared to free holds outside greenbelt. On the not so great side, any condo would be eventually competing against freehold towns currently being built. You're basically betting that LRT will be as broken as it is today, and traffic in Ottawa would approach Toronto levels, for middle class government workers to want to squeeze into condos.
A further problem in Ottawa is the cost of construction and approvals etc make Condos expensive relative to land costs. So I can buy a freehold mere blocks away from most two bedroom condos for the same price.
Deal Addict
Dec 4, 2016
1867 posts
888 upvotes
fogetmylogin wrote: A further problem in Ottawa is the cost of construction and approvals etc make Condos expensive relative to land costs. So I can buy a freehold mere blocks away from most two bedroom condos for the same price.
I see this as land being cheap relative to construction and red tape costs. Other than land/housing costs, things in Ottawa cost the same or more than Toronto, due to a relative lack of unskilled labor, hence the high median household income. Interestingly, REIT's seem rather keen on building brand new rental buildings in suburban Ottawa, often in areas far, far out of downtown. The cluster of rental apartments in Kanata near the gold course, and the frontier building next to Blair station. They got built, and more are on the way. I do wonder how the institutional investors justify the cost of construction, no matter how cheap they get their land.
Deal Fanatic
Jul 4, 2004
5863 posts
1921 upvotes
Ottawa
IMO, the biggest factors in the increases in prices of townhomes and condos are the tightening of mortgage rules and the increase in property values in the city.

With the new rules, many buyers simply cannot qualify to purchase properties above $450-550k and in Ottawa, that's below or near the starting point for singles which has forced a lot of buyers to lower prices properties (typically apartments and townhomes) that has really pushed the prices of those up. I haven't really checked but I believe that if you can stretch your budget beyond $550k, there are a lot more opportunities and you get a lot more value for your money (basically you have tons of buyers competing for sub $550k properties so there's tons of demand but once you cross that line, the number of buyers is much, much less and buyers have a lot more choices)
Deal Addict
Dec 4, 2016
1867 posts
888 upvotes
michelb wrote: IMO, the biggest factors in the increases in prices of townhomes and condos are the tightening of mortgage rules and the increase in property values in the city.

With the new rules, many buyers simply cannot qualify to purchase properties above $450-550k and in Ottawa, that's below or near the starting point for singles which has forced a lot of buyers to lower prices properties (typically apartments and townhomes) that has really pushed the prices of those up. I haven't really checked but I believe that if you can stretch your budget beyond $550k, there are a lot more opportunities and you get a lot more value for your money (basically you have tons of buyers competing for sub $550k properties so there's tons of demand but once you cross that line, the number of buyers is much, much less and buyers have a lot more choices)
Definitely. That's why 40+ year old condo towns in Kanata suddenly has buyers, and even 40+ year old concrete condos in Kanata are getting interest. 700k+ freeholds are sitting on the market.
Sr. Member
Aug 14, 2007
524 posts
281 upvotes
Ottawa
People may think that standard freehold townhouses have the biggest gain for the past two years compare with other type of properties in the market. What I find interesting is if you only look at the return, stacked townhouse are outperformed standard freehold townhouses for the past two years. If you can find 3 bedrooms stacked townhouses, you can rent it for $1700 range compare with standard freehold townhouse for $2000, the rental return is actually better than freehold townhouses after you included all the fees.
Deal Addict
Dec 4, 2016
1867 posts
888 upvotes
audiorichard wrote: People may think that standard freehold townhouses have the biggest gain for the past two years compare with other type of properties in the market. What I find interesting is if you only look at the return, stacked townhouse are outperformed standard freehold townhouses for the past two years. If you can find 3 bedrooms stacked townhouses, you can rent it for $1700 range compare with standard freehold townhouse for $2000, the rental return is actually better than freehold townhouses after you included all the fees.
True, but stacked towns carry the condo stigma, so it doesn't command the freehold premium. If you extend analysis to detached, you will find even lower yields on singles, as it's hard to rent a house outside greenbelt for more than 2500, while purchase price and property taxes on singles are much higher.
Jr. Member
Apr 25, 2019
184 posts
205 upvotes
Ontario
Good day folks ,

I was wondering if there is a meetup group in Ottawa for Real estate investors (residential).
Would like to meet up with like minded individuals and/or real estate agents who can help build real estate portfolio in Ottawa and surrounding areas.
As we all know home prices keep climbing up and it gets tougher to get mortgages day by day, would be ideal to partner up with a real estate joint venture (JV) to leverage rental portfolios.

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