Bucking the trend of Greater Toronto Area, the Ottawa Region has been on a tear for over a year, and there is no sign of things slowing down. In fact, things are heating up and yet we are only now entering the Spring market — where we can expect more price gains, and some frustrated buyers who find it increasingly hard to nab their dream home in the Ottawa market. Sound familiar?!
Here, I will talk about some of the factors contributing to the demand, and also steps you can take to prepare yourself for doing the rounds with your real estate agent. And by the way, this is NOT the sort of market you would try to wing it on your own — you need a crackerjack real estate agent.
The Ottawa region has been identified by The Real Estate Investment Network as the number one ranked town in all of Ontario to have good real estate performance over the next five years. NUMBER ONE!!
Yes, sometimes it comes down to Economics 101. At a time when the region has never seemed more desirable, there is a shortage of homes available for sale. Ralph Shaw, the President of the Ottawa Real Estate Board (OREB) says:
“Right now just about every agent in the city has somebody looking to buy, but we can’t find what they’re looking for because our inventories are low,”
You can see why homeowners are reluctant to list — now is the time to make money, by holding onto their homes as long as possible. Royal LePage expects prices to keep climbing in 2018, as a strong regional economy keeps buyers coming to a market where homes for sale are becoming scarcer.
Our own Tenely Kam caught up with Shauna Brownlee Starr in Ottawa to get her take on the current market. Shauna brings twelve years of success and hard work to her role as a premier real estate agent in the Ottawa market, and her services are often in demand — especially when it comes to helping people new to the region.
Shauna emphasized the low inventory of homes is causing havoc — new listings are going up and selling almost immediately — especially in the west end, her home, where they are seeing much more traffic.
The National Defense Department have moved into the area, and the city has announced plans to commence construction of a new LRT line in 2019. Shauna says the demand is in all types of homes — fully detached, semis, town homes as well as condos.
Sarah Niedoba, writing for BuzzNews, coined the Ottawa market as the market to watch for 2018 . She quoted Ralph Shaw as saying:
“One thing that’s unique about Ottawa’s condo market, is we have a lot of townhouse condos. So you’re not just looking at condo apartments, you’ve got these condos that are a great option for young families, at an affordable price point.”
We all know it’s almost impossible for Millennials and Gen X’ers to afford a new home in Vancouver or Toronto, as the average price is so darned high. Not many can come up with the down payment and service a mortgage on a million dollar starter home. In the Ottawa market, a condo’s average price is half that of Toronto at $273,200, and the benchmark price for a single detached home in Ottawa is $409,200. Now THAT’s attractive!
With the new mortgage stress test rules firmly in effect now, Ottawa price levels are highly desirable — home ownership IS an option — and a money making option at that.
It’s not just the military bringing new buyers to the region. In modern society, there is a growing segment of the working population who work remotely from their homes. They don’t have to be in proximity to their employers or clients. The digital age is changing that forever.
We are seeing many remote workers flee the Greater Toronto Area and settle in Ottawa, where they can pursue the dream of home ownership and take in all that Ottawa has to offer.
In another recent article, Sarah Niedoba confirmed factors driving the Ottawa housing market include housing affordability, new transportation infrastructure, and a strong job market.
Home Buying Tips in the Ottawa Region
Having survived more than one torrid market cycle in the GTA as well as assisting clients all across Canada, we have plenty of anecdotal experiences to draw upon and share with you. It applies in any hot market. Here are several tips for home buying success if you are coming to Ottawa.
Research the regions you think you want to settle into — whether it’s Stittsville in the west, or Britannia Village, just steps from the Ottawa River.
Do some number crunching and decide the most amount of money you are willing to spend on your mortgage payment, property taxes, condo fees and utilities. This will effectively dictate your purchasing budget, as will of course the amount of mortgage you qualify for. Here is a simple tool from our website that can help you play with numbers and run some scenarios.
This is super important. Translate to — get yourselves a mortgage pre-approval certificate from a reputable mortgage lender. Here is our handy Pre-Approval Primer – things you need to know.
The main benefits of a mortgage pre-approval are:
The higher your deposit, the more attractive your offer. It shows how serious you are and the seller’s real estate agent will love you for it. Do not cheap out!
You know what closing date is best for your circumstances, but if you are trying to stand out over other offers in the Ottawa market, try to give the sellers the date THEY want. That might mean closing quickly, and carrying two places for a short while, but it can make all the difference!
This is where can get a little uncomfortable, and you have to know where to draw the line. Your real estate agent may pressure you into making a subject-free offer with absolutely no conditions, but we rarely advocate this approach. And in fact we saw first hand numerous instances where that proved disastrous in the GTA only last year.
Review each condition with your real estate agent. For example, an inspection condition might be excluded if you are buying a near new home in pristine condition.
Subject to financing (COF) within five business days is typical. You should not remove a COF clause, but you can make yours shorter if you are properly prepared. If your mortgage broker already has your income, employment and down payment documents, and has already pre-approved you, s/he should be able to convert this to a firm approval within 24 to 72 hours, depending on your specifics.
You may be an alpha type who prides herself on getting it done, no matter what the challenge. But this is no time for pride. Surround yourself with the best service professionals possible — this is after all one of the largest financial transactions you will ever make.
And do so with the fun knowledge that someone else is paying your top dog real estate agent and mortgage broker. Chances are, their services will not cost you a penny.