Ottawa-Gatineau Housing Market

[TOexpat]

Also really need to separate out the condo market from the rest of the housing market. That is where you saw the bubble effect, where you had speculators (not investors) buying properties and are now realizing that these properties that did rise for a few years are now dropping like stones. I partly attribute this to the terrible quality of Ottawa Condos as most are simply undesirable, lack character and were often done on the cheap. Hard to get someone to pay $400 a sqft for a cookie cutter condo with 8 ft ceilings. But irrespective of the neighbourhood condos are not moving. With new buildings coming on line people who are forced to sell will need to take 10% cuts at least. And forget growth in the next few years, as there won't be any in Ottawa and once growth comes you can count on higher mortgage rates stifling any possible growth. It is ugly - unless you are a buyer.

[McC]

Originally Posted by canabiz

Yes that is true and you can also say the same thing about other desirable neighbourhoods in Ottawa, namely Glebe, Rockcliffe Park, Old Ottawa South. Properties in attractive locations will always command a premium, in good and bad times.
http://ottawacitizen.com/news/local-...ublic-servants

I can't speak for the other neighbourhoods, but here on the near west side, price point seems to make a real difference; entry-level homes in the $350-400K range, and (often gorgeous) homes $700K+ seem to be languishing on the market. The problem at the entry level I get, the government isn't hiring and rapidly promoting new grads from entry to mid-level positions at anywhere near the rates that they were just a few years ago when we bought our townhouse here (12 other bidders!). The softness in the "higher" range I can't explain as easily, except maybe as a consequence of the first issue? People looking for their second home are worried they won't get what they'd recently thought they might be able to for their first home, and meanwhile mortgage rules are tightening, RE down payments, etc. plus general uncertainty in the economy and jobs situation are all putting a damper on demand above a certain "comfortable" price threshold?

[canabiz]

Originally Posted by McC

I can't speak for the other neighbourhoods, but here on the near west side, price point seems to make a real difference; entry-level homes in the $350-400K range, and (often gorgeous) homes $700K+ seem to be languishing on the market. The problem at the entry level I get, the government isn't hiring and rapidly promoting new grads from entry to mid-level positions at anywhere near the rates that they were just a few years ago when we bought our townhouse here (12 other bidders!). The softness in the "higher" range I can't explain as easily, except maybe as a consequence of the first issue? People looking for their second home are worried they won't get what they'd recently thought they might be able to for their first home, and meanwhile mortgage rules are tightening, RE down payments, etc. plus general uncertainty in the economy and jobs situation are all putting a damper on demand above a certain "comfortable" price threshold?

I think you touched on all important points, McC. There is a lot of uncertainty in the federal department I am working for, lots of shuffling and changes in the last little bit and the hiring freeze has been in effect for at least the past 3 years. I suspect things are not much better in other departments.

Will see what happens after the election next year. Ottawa is, matter-of-factly, a one-industry (government) town and the local economy is directly tied into that. I have no doubt some of the well-known restaurants recently closed (discussed in another thread) because the competition is fierce for the same (or less) amount of disposable income.

[1overcosc]

Originally Posted by canabiz

I think you touched on all important points, McC. There is a lot of uncertainty in the federal department I am working for, lots of shuffling and changes in the last little bit and the hiring freeze has been in effect for at least the past 3 years. I suspect things are not much better in other departments.

Will see what happens after the election next year. Ottawa is, matter-of-factly, a one-industry (government) town and the local economy is directly tied into that. I have no doubt some of the well-known restaurants recently closed (discussed in another thread) because the competition is fierce for the same (or less) amount of disposable income.

I imagine the share of government employees in the city's total population is declining. I mean our population is still growing at about 1%-1.5% per year, yet federal employment levels drop in absolute terms. What's compensating? Is the proportion of people in the workforce declining, or has there been an increase in other sectors? I know private-sector IT is back on the upswing in Ottawa but I didn't think it was that dramatic.

[canabiz]

Originally Posted by 1overcosc

I imagine the share of government employees in the city's total population is declining. I mean our population is still growing at about 1%-1.5% per year, yet federal employment levels drop in absolute terms. What's compensating? Is the proportion of people in the workforce declining, or has there been an increase in other sectors? I know private-sector IT is back on the upswing in Ottawa but I didn't think it was that dramatic.

1over, from the charts in the Citizen article I quoted above, yes the number of public servants have declined compared to a high in 2010 (where 1 in 4 workers in the region was a government employee (federal, provincial and municipal).

What is not described in the story is how many private sector jobs (IT or otherwise) are directly related to government business e.g consultants, temp. help. When the going gets tough and the budget needs to be tightened, it is hard to see the government spending $ on (questionable) contracts.

There are some good stats here that can help answer your questions

http://ottawa.ca/en/long-range-finan...d-demographics

[TOexpat]

Condo market continues its dismal performance into May. Sales down 9% on year, with more inventory coming.

http://ottawacitizen.com/business/lo...warm-up-in-may

[YOWetal]

Originally Posted by TOexpat

Condo market continues its dismal performance into May. Sales down 9% on year, with more inventory coming.

http://ottawacitizen.com/business/lo...warm-up-in-may

While I am also bearish on the Ottawa Real Estate market down 9% is far from dismal.

[OTSkyline]

Maybe I'm just selfish but I'm kind of hoping for a temporary slump so I can scoop up a unit for less

[TOexpat]

Originally Posted by YOWetal

While I am also bearish on the Ottawa Real Estate market down 9% is far from dismal.

What adjective would you prefer?

[1overcosc]

Originally Posted by OTSkyline

Maybe I'm just selfish but I'm kind of hoping for a temporary slump so I can scoop up a unit for less

Same. But don't feel too bad; it's when the prices drop enough for sales to pick up that the downward slide halts.

[canabiz]

On another note, I have been keeping track of the rental prices for areas I am interested in (Barrhaven, Centrepointe, Tanglewood) and the same units are charging less for rent this year, compared to last year.

This is not a scientific research by any stretch, I gather data from Kijiji and MLS and keep track on a spreadsheet but you would have thought that the rental market should blossom, given the fact folks may not be ready to dive into the real estate market due to different reasons (sluggish economy, changing mortgage conditions, supply & demand).

[YOWetal]

Originally Posted by canabiz

On another note, I have been keeping track of the rental prices for areas I am interested in (Barrhaven, Centrepointe, Tanglewood) and the same units are charging less for rent this year, compared to last year.

This is not a scientific research by any stretch, I gather data from Kijiji and MLS and keep track on a spreadsheet but you would have thought that the rental market should blossom, given the fact folks may not be ready to dive into the real estate market due to different reasons (sluggish economy, changing mortgage conditions, supply & demand).

The rental market is soft all over town. I didn't know anyone was "interested" in renting in Barrhaven, Centrepointe, or Tanglewood. I would think the rental market there would be hurt by the very low interest rates which makes buying on credit more affordable. If you look at the numbers in the far suburbs it still makes more sense to buy then rent even without any expectation of appreciation. The same is not at all true of a centrally located house and also not true of most downtown condos.

[canabiz]

Originally Posted by YOWetal

The rental market is soft all over town. I didn't know anyone was "interested" in renting in Barrhaven, Centrepointe, or Tanglewood. I would think the rental market there would be hurt by the very low interest rates which makes buying on credit more affordable. If you look at the numbers in the far suburbs it still makes more sense to buy then rent even without any expectation of appreciation. The same is not at all true of a centrally located house and also not true of most downtown condos.

You will be surprised to hear the rental market is solid for Centrepointe and Tanglewood and it's getting there for Barrhaven and possibly other 'burbs like Kanata/Orleans.

For starters, Centrepointe and Tanglewood are within walking/biking distance and very short bus rides to Algonquin College. Students obviously provide a good pool to find tenants (whether they make good tenants is another discussion). Those 2 communities are also a short trip from the highways and are right in between downtown and the hi-tech corridor in Kanata. Barrhaven is also not far from Kanata as well as other major employers (the new RCMP HQ and the soon-to-be DND HQ in the former Nortel campus).

Yes I agree with you it makes more sense to buy than rent at the moment but you have to remember 1 thing: Not everyone can afford or want to buy a house, no matter how attractive the rates are. Maybe they don't have a good credit history, maybe they are in the military and don't want the commitment before their next move, maybe they are in Garth Turner's camp and don't believe they should invest in real estate at the moment. Whatever their motives or rationale is, they still need to have a roof over their heads and that is where the rental properties will come into play, depending on their needs.

[canabiz]

Some interesting stats (small sample size, granted) from a local realtor's flyer today.

Barrhaven listings and solds since March 1, 2014

Single: 215 listings and 99 solds for 46%
Freehold townhouses: 164 listings and 109 solds for 66.5%
Condos: 56 listings and 38 solds for 68%

It looks like the less expensive homes are moving well. I imagine the numbers are likely similar for other 'burbs, namely Orleans, Kanata, Stittsville, Riverside South etc.

[TOexpat]

Canbiz: seems like some pretty involved analysis! It is sometimes hard to know the truth as realtor's and their industry association control the information. Very annoying.

Speaking of: does anyone know how a non- broker can get on the mlx or see actual sale prices of units?

[canabiz]

TOExpat, I was quite surprised to see those stats on the flyer as well. Usually all you see is their own schpeel why people should pick them + their listings and things of that nature.

Are you looking for sold price on a particular unit? If so, PM me the info and I can ask my colleague who is a realtor on the side to check it on MLX. Not sure if he will do it but no harm in asking.

[canabiz]

It will be interesting to see how the Liberal majority will have an impact on the Ottawa housing market, if at all.

We know they support the second phase of LRT and will provide some funding whereas Tim Hudak has been flip-flopping on this issue.

It is also possible Tony Clement may make a run for the Ontario PC leadership. It remains to be seen if public servants will breathe a sigh of relief and may subsequently be more inclined to make big financial decisions, knowing their jobs maybe safe(r).

[1overcosc]

A friend of a friend is a real estate agent in Russell, and she was telling me that many people in Russell who work for the provincial public sector were deferring decisions due to uncertainty. The risks were clearly influencing people.

[1overcosc]

Of note is how crushing the Liberal win was in Ottawa. Liberals won Ottawa-Orleans by over 10,000 votes, and won OWN and OS handily, too. They even had relatively strong seconds in Nepean-Carleton & Carleton-Mississippi Mills, where they knocked Maclaren & Macleod down to below 50% of the vote. Not to mention they won easily re-election in Glengarry-Prescott-Russell.

This may be the best result the Liberals have had in Ottawa for decades.

[canabiz]

Yes, it will be interesting to see how the federal election (in just over a year) will turn out to be.

Obviously federal public servants make up a large portion of the workforce in this National Capital Region and they are not going to make any big financial decisions (purchasing a house would be one) if they know their jobs are shaky.

With all that said, it is possible Wynne may implement some austerity measures that Hudak proposed and I have to give it to him for his honesty but for now the provincial public servants can definitely breathe a sigh of relief. My neighbour and a friend are both teachers and they have been critical of Hudak, rightly or wrongly and I bet you they probably had a good sleep last night