Ottawa and Surrounding Area Real Estate market discussion

GrumpyOne1 wrote: ↑ In case people are curious for my update. I received multiple offers, however none over asking (asking price was set fairly high. Accepted full price offer closing in 35 days (conditional on financing and inspection).

So yeah Covid did affect Ottawa RE but nowhere near what people are assuming it did.

Your statement is only correct if the market has stabilized (which I don't believe it has). If it continues like this, and there's no reason to think it won't, April will be the first months in probably over a year where available inventory rises.

fogetmylogin wrote: ↑ The next domino to fall city budgets. How do people feel about a 10% property tax increase. I mean obviously everyone is against it but does this drive people out of the city in a substantial way? We are already looking at hefty increases for transit projects. Do the surrounding communities real estate markets eventually benefit from this?

https://www.cbc.ca/news/canada/ottawa/c ... -1.5526514

All levels of government are piling up enormous debt loads that will have to be repaid at some point by program cuts and higher taxes and user fees. Fact is that some people will be in a very difficult financial position when this is eventually over. Some people will simply not recover. I am reading lots of articles of permanent business closures and that high unemployment rates, the likes that have never been seen before, will be for a long period of time. Am also reading articles on higher inflation which will result in higher interest rates. This is further down the road of course.

Surrounding communities may benefit. If you don't use public transit, for instance and can adjust to the lower number of amenities of a smaller community while still readily drive to Ottawa when needed, a difference in property taxes may be appealing. Make sure to do your research before you jump though as some smaller communities such as Carleton Place, for instance, current have higher property tax rates than Ottawa does.

canabiz wrote: ↑ The waiver at the end of the article is new and definitely jarring...

https://www.cbc.ca/news/canada/british- ... -1.5525681

The waiver is jarring. I also wonder how many buyers may be affected by the vacant possession clause as noted in the article:

"Further complicating the situation is so-called vacant possession — a legal obligation to ensure that a sold property is in a state fit to be occupied, which can include requiring tenants to vacate when the new owner takes possession.

A moratorium on evictions in B.C. means those provisions can't be enforced in all situations, leaving some new owners unable to access homes they have purchased."

skeet50 wrote: ↑ The waiver is jarring. I also wonder how many buyers may be affected by the vacant possession clause as noted in the article:

"Further complicating the situation is so-called vacant possession — a legal obligation to ensure that a sold property is in a state fit to be occupied, which can include requiring tenants to vacate when the new owner takes possession.

A moratorium on evictions in B.C. means those provisions can't be enforced in all situations, leaving some new owners unable to access homes they have purchased."

That's a good point. My wife had a couple of sales this past week and both now include a clause to the affect that "Closing date might change because of COVID ...". In these cases, vacant possession wasn't an issue (in one, the tenant is still on lease and staying, the other was vacant already) but that's a good point that if there had been a tenant, it might not be possible to provide vacancy on closing. Uncertainty like this will likely further affect the market negatively.

lol at Cardel...I was actually going to buy there but because of their artificial scarcity lot release strategy I said screw it....maybeI willl return when they start dropping prices

canabiz wrote: ↑ Sorry I didn't have a chance to read previous pages as I am just starting to get back to RFD again after a long absence...There is a definite impact from this pandemic on the (local) housing market.

My colleague/friend sublet a nice place in downtown Hull, walking distance to downtown Ottawa, and he was making steady $ renting the place out to AirBnB guests over the past few years because the location is fairly ideal. He had to shut it down last week because it has been losing money since January when the outbreak happened in China and he can no longer afford to incur more debt. At this rate, he is unsure if and when he will start that back up again, if at all.

I would agree that the rental market has been hit faster than the sales. We have two nearly identical units in the same complex. Last September, when the tenant in one left, I had tons of serious interest for renting it within a few days and basically picked my favorite. The tenant in my other unit gave notice a few weeks ago so I listed it for rent and there's been almost no interest in 3 weeks (really just 2 serious; the first choose something else and the second wasn't suitable). I looked on MLS and there are a lot more available rentals than there were in recent past and the prices do seem lower to me. The demand for rentals is low enough that we actually decided to list our unit while the prices are still high rather than try to rent it. It was conditionally sold (at a price I'm happy about) in one day.

Not sure if it will work out my way but I'm thinking I can possibly buy a similar unit in a year or two at a significantly lower price.

michelb wrote: ↑ I would agree that the rental market has been hit faster than the sales. We have two nearly identical units in the same complex. Last September, when the tenant in one left, I had tons of serious interest for renting it within a few days and basically picked my favorite. The tenant in my other unit gave notice a few weeks ago so I listed it for rent and there's been almost no interest in 3 weeks (really just 2 serious; the first choose something else and the second wasn't suitable). I looked on MLS and there are a lot more available rentals than there were in recent past and the prices do seem lower to me. The demand for rentals is low enough that we actually decided to list our unit while the prices are still high rather than try to rent it. It was conditionally sold (at a price I'm happy about) in one day.

Not sure if it will work out my way but I'm thinking I can possibly buy a similar unit in a year or two at a significantly lower price.

This makes sense. The economic situation has deteriorated rapidly and the medium and long term trajectories are permanently altered. Rental market reflects this. Hiring is completely frozen. Most newly arrived or newly employed rent. The housing market can diverge from fundamentals for a substantial period of time. A year or two as you say may be required before prices fall noticeably and consistently. Of course we could be back to normal by then and/or we could see a surge of immigration as people flee less stable areas.
Thanks for the first hand intel!

Some interesting preliminary data on the job losses.

"The biggest chunk of job losses came in the accommodation and food services sector, which shrank by almost one-quarter. The next hardest hit sector was IT, arts and culture, which lost 13 per cent of its jobs. Education took a nine per cent hit, while wholesale and retail trade lost seven per cent."

https://www.cbc.ca/news/business/canada ... -1.5527359

I wonder how Ottawa's job market is faring? Accurate job numbers are difficult to come by for Ottawa due to the small sample size number and the recent reported unemployment rate of 5.1% for March uses a 3 month rolling average. (https://obj.ca/article/unemployment-rat ... 9-slowdown). Stats Canada reported that the tech sector added 2,300 positions while the federal gov't declined by 3,200. But those numbers appear to be captured in the 3 month rolling average.

About International Students..

https://www.thestar.com/amp/news/canada ... demic.html

‘Billions of dollars are at risk.’ Colleges and universities scramble to protect international student sector amid COVID-19 pandemic

'In a scenario that is no doubt being replicated in major urban centres across Canada, sales of homes in the city dipped 68% in the first week of April while condo sales were down a whopping 80%.'

https://torontosun.com/news/local-news/ ... ltor-warns

As an aside, if you know someone that has requested to enter Canada on a student permit, I believe if they received their authorization letter dated March 18th 2020 or before, they are allowed to travel and enter Canada. If their authorization letter was March 19th or later, I do not believe they can enter Canada during the current COVID travel restrictions.

William W wrote: ↑

LOL thanks for sharing that letter from Cardel. Man they sound really desperate even though they're trying so hard not to.

This is the best part though: "No matter how a builder tries to inject fairness or randomness into the opportunity to buy a home, the sheer demand means that someone's going to walk away disappointed". How about "injecting" fake campers instead? lmao

I don't have any sympathy for Cardel or the other builders.

I do feel bad for anyone that signed up for a new build and lost their job though...

dc200 wrote: ↑ LOL thanks for sharing that letter from Cardel. Man they sound really desperate even though they're trying so hard not to.

This is the best part though: "No matter how a builder tries to inject fairness or randomness into the opportunity to buy a home, the sheer demand means that someone's going to walk away disappointed". How about "injecting" fake campers instead? lmao

I don't have any sympathy for Cardel or the other builders.

I do feel bad for anyone that signed up for a new build and lost their job though...

Why the hate. They are just trying to make a living. Anyway I bet they could sell out in a day just by advertising at last spring's prices for one day only. Builders follow a never drop the price rule but they might regret it later. We'll see if course. It must suck to have a pre-con and have lost your job. I think we can all agree with that.

fogetmylogin wrote: ↑ Why the hate. They are just trying to make a living.

They were being dishonest and deceitful by using the fake camper technique to artificially pump up demand through FOMO. There was literally no need to do that unless they were looking for ways to justify ridiculous price increases.

In the end, they only hurt themselves. They could've sold out completely before the lockdown if they hadn't done that.

michelb wrote: ↑ As an aside, if you know someone that has requested to enter Canada on a student permit, I believe if they received their authorization letter dated March 18th 2020 or before, they are allowed to travel and enter Canada. If their authorization letter was March 19th or later, I do not believe they can enter Canada during the current COVID travel restrictions.

I would assume most planning on arriving in September wouldn't have received their authorization before then. I think foreign students are a big factor in the byward market condo market. Maybe losing students for one year won't be that critical but it certainly won't help. The Airbnb market is also huge there. It's a shame as the past year has been very good after years of stagnation.

dc200 wrote: ↑ They were being dishonest and deceitful by using the fake camper techniqueto artificially pump up demand through FOMO. There was literally no need to do that unless they were looking for ways to justify ridiculous price increases.

In the end, they only hurt themselves. They could've sold out completely before the lockdown if they hadn't done that.

Is that an opinion, a guess or a fact?

If it is not the latter, that's defamation/libel. I'm sure you will get sued if you're not hiding behind a keyboard.