Multiple offers are always a possibility in some of Ottawa’s most desirable neighbourhoods. With inventory levels at record lows and demand, sky-high multiples are happening across the city and right into suburbia. The hottest segment in the city right now is a suburban townhouse. This was never the case in previous years! Amazing to see this phenomenon develop over the past few months. Now what is happening is that new prices are being established as buyers bid homes up. This will make 2018 a year were we might see some buyers priced right out of our market.
With so much money at stake on every sale it is so important to have the right representation. A listing that is well priced, presented & staged, and marketed should receive multiple offers. From there it will be the Realtor’s role to make sure you maximize your return and help navigate through all the offers. We helped a client recently sell their house for 6k more than the exact same model of townhouse right next door. We had 13 offers, they had 6. It matters who you work with.
If you are thinking of buying or selling please feel free to get in touch.
The Ottawa housing market has been extremely active over the past 6-9 months. It has been quite amazing to observe. New regulations and rising interest rates have some homeowners wondering if we have seen the last of these price gains. Here is a market minute update:
Our local economy is strong and consumer confidence is high. I really see no indications that this real estate market will cool anytime soon. Especially when I look at the most basic economic concept of supply and demand. Right now the supply is very limited in Ottawa and the demand is strong. We have only 6 weeks of inventory available right now in many neighbourhoods. This indicates a strong sellers market. We haven’t even hit the Spring market yet! If you are curious to whats happening in your neighbourhood feel free to get in touch.
After our annual client Santa party I was approached by a past client who asked me why I do all this after sale stuff. The contests, newsletters, cards, client events etc. He said he would refer our team business no matter what, and that I really didn’t need to do all this stuff. It was an interesting question. The answer is at the heart of my business. Here is what is on our wall at the office:
We are just living out our mission statement. That is what gets me fuelled up every day and excited to go to work. You see our mission in real estate is to create a raving fan service experience for every client and to bring value long after our clients buy or sell. We will always strive to provide this service to clients if they bought 12 years ago or 12 months ago. As our team grows we are able to offer better services and bring new experiences. I look forward to sharing some new initiatives with everyone in the near future.
This year our real estate market took everyone by surprise. At the beginning of the year, most economists were predicting a sluggish market with little or no price gains. The reality is that it was an incredibly strong year for real estate in Ottawa with solid price gains. This was fuelled by a lack of inventory in most neighbourhoods and segments of the market. The most significant change I found this year is that almost all styles of homes in various price ranges were extremely active. I had buyers looking for luxury homes over $1M and first-timers looking in the suburbs. In both cases, and everything in between, we were faced with lack of inventory and multiple offers. In some instances, we were competing against 12-14 other offers. It made buying a house more challenging for sure. Here is a statistical look and recap of the Ottawa market in 2017.
* All data is from Ottawa MLS statistics
** CDOM: Consecutive days on market
*** Percentage change is from 2016 stats
IMMIGRATION
Under the Liberal government, immigration has increased to over 300,000 annually. Many are settled into smaller cities but eventually make their way to the larger urban centres. Since Ottawa is the number 1 place to live in Canada, it is always a popular destination. This graph illustrates the future population growth in Ottawa.
POPULATION VS EMPLOYMENT
DEBT
The biggest concern I have right now is the mountain of debt that Canadians are carrying. We have more debt per capita than any other developed nation. This is something we will have to monitor moving forward.
FOREIGN BUYERS?
Contrary to what some people believe, Ottawa’s prices have not been rising due to foreign buyers. Not yet anyway. Right now foreign buyers own less than 0.7% of Ottawa condos and this is the same percentage as in 2014 (according to CMHC). In Vancouver, this is as high as 7.5%.
What I am seeing is some families relocating to Ottawa from Toronto. Basically cashing out in T.O. and moving down the 401. They are attracted to Ottawa because of its relative affordability, awesome lifestyle, and its location that is close to both Montreal and Toronto. As other major markets get too expensive we may start seeing more foreign buyers choose Ottawa. We are like the Switzerland of real estate.
SUPPLY/ DEMAND
Prices are usually determined by the most basic economic principle of supply and demand. This past year inventory was tight and demand was solid. I have many buyers that should have been in the market in 17′ but could not find a place because of tight supply and multiple bids. They along with many other buyers will now seek to find accommodation in 2018. I think our tight supply will continue into the new year. I think we are in for another competitive market in early 2018.
UNEMPLOYMENT
Unemployment is always one of biggest indicators when it comes to real estate prices. In Ottawa, we are fortunate to have a stable workforce anchored by the public service. Income levels support our current real estate prices and would still be able to accommodate new price gains. Essentially affordability is good. Especially compared to other markets like Vancouver or Toronto.
OTTAWA REQUIRED INCOME VS ACTUAL INCOME
MORTGAGE RATES
I sat in on a presentation by CIBC chief economist Benjamin Tal. He was asked if rates were going to rapidly increase in the upcoming few years. His response was that we won’t ever see very high rates again. We have different mechanisms and a central policy that we did not have in the 80’s/90’s when rates for homes are similar to what we are paying on credit cards.
MORTGAGE RULES: NEW STRESS TEST
The new mortgage rules will affect affordability for buyers. Insured mortgages will now need to be stress tested at the higher bank qualifying rate. This will reduce the average buyer’s purchasing power by about 20%. I am one of the few Realtors who actually agrees with this policy. We need to have buyers that can withstand any future increases in the mortgage rates. I think it is prudent and will help ensure that home buyers are not taking on debt that they can’t afford in the future. This protection will only help stabilize our market in the future.
OTTAWA CMA, MLS ® PRICE
MY PREDICTIONS FOR 2018
This time of year is usually pretty slow. However, I am off to present an offer for one of my clients in a snowstorm. We will be competing against 6-8 others. Basically what I am getting at is the market still has no inventory in many segments. I expect this trend to continue right through the Spring market. It will put upward pressure on prices again. I had some clients purchase a home in multiple bids in Hintonburg earlier this year. They were concerned that they paid too much. Buyers remorse is inevitable when you go way over asking price. This week the exact same unit with fewer upgrades came for sale and sold for 20k more than what my clients paid just 3 months ago. It tells me that some buyers in these areas are getting desperate to find accommodations. Once again we could be embarking on another very active and robust market in 2018. With the higher prices in the central locations, this will also help condo sales. Many buyers are being priced out of the freehold market and are turning back to condos as a viable option. For me, the wildcards in the market are the new mortgage rules and how Ottawa can absorb them. I think we can but it will make it harder for buyers in the higher price points. My gut tells me that there will be negative news from Toronto and Vancouver this year on the average price front. There are so many rules and regulations now for their markets to continue their torrent pace. How does this national coverage (if it happens) affect the consumer confidence here. Again, this is just my personal opinion here. If you are curious about what’s happening in your neighbourhood feel free to get in touch. We are always happy to provide you with sales data in and around your home.
PERCENTAGE INCREASE OF OTTAWA HOUSING PRICES
* Based on RES & CON MLS Sales
If you are curious about your homes worth please fill in this form for a no-obligation market assessment.
One trend I can see gaining some traction in Ottawa real estate over the upcoming few years is coach houses. A coach house is a separate dwelling detached from the principal house that sits on the same lot. Personally, I think with the right property and location this could be a viable option for people in lieu of a basement apartment or nanny flat. Could also be perfect for being a purpose-built Airbnb rental. Let’s explore some of the regulations the city has in place for this.
Basic requirements to qualify for a Coach Houses in Ottawa:
Secondary Dwelling Units and Coach Houses: The City allows for either a Secondary Dwelling Unit or a Coach House, but not both.
Primary Building Types and Coach Houses: The City only allows Coach Houses to be built on lots which have a single family, a semi-detached, duplex or some townhouses. Only a single family home will typically have the lot space to conform.
Maximum Size: The City restricts the maximum size to no greater than 40% of the footprint of the principal dwelling unit, up to a maximum footprint of 95 square metres, in the rural area and 80 square meters in the urban area and may not cover more than 40% of the backyard.
The height of a Coach House: for the City allows for a 1 storey Coach House as-of-right (straight to building permit) in the urban area and a 2 storey Coach House in the rural area on a lot 0.4 hectares or greater.
Setbacks for Coach Houses: The are two setback distances to the rear and interior side lot lines to choose from: Either a 1-metre maximum setback AND/OR a 4m minimum setback
Minimum Access Route: An unobstructed 1.2 m wide access is required from a public street or travelled lane to the Coach House. This access may comprise a driveway.
Parking: No parking is required for a Coach House dwelling.
Privately Serviced Coach House: Minimum lot size of 0.4 hectares and must share one service well or septic.
Frequently Asked Questions:
What does one cost: typical coach house is between $200 and $300 a square foot. That would put the cost of a 500 square-foot coach house in the range of $100,000 to $150,000, It can vary from builder to builder. This is just a guideline.
Can a Coach House get its own Address?
Yes, once the building permit has been applied for.
Can a Coach House have a separate servicing connection?
The coach house can be submetered.
Can I build a Coach House and a Secondary Dwelling Unit?
No.
This is just a synopsis of some of the guidelines for this style of purchase. For more information check with the city at www.ottawa.ca/coachhouse
If you are considering buying a home in Ottawa with the intention of building a coach house, call me to discuss. We can help you find a house that will fit in with your requirements.
The Ottawa real estate market is still pretty hot, especially considering the time of year. Many Ottawa home buyers are looking to purchase before the new mortgage rules are implemented in January. Prices are up again over last year. Our average price for a residential-class property was up 3.2% over last November, sitting at $418,354. It is the number of houses sold that is impressive. In the residential-class property segment, there were 945 units sold which is an increase of 24% over last November. In the condo market, 294 units sold which is an increase of 27.8%. With a combined total of 1239 units sold in November and an overall increase of 24.9%. The prices may not have increased much from last year’s November but the number of units sold shows how active the Ottawa real estate still is.
As always feel free to reach out if you are curious to whats happening in your neighbourhood. I am always happy to help.
Thanks everyone for participating in our client draw. It is lots of fun to put these contests and events on throughout the year. I feel blessed and grateful to have such wonderful clients to work with each year. This is a very small token of my appreciation. Hope the winners enjoy the gifts. I am sure the $500 shopping spree will come in handy this time of year.
I believe many Ottawa home buyers over the upcoming 5-10 years will be looking for homes with in-law suites. We have an aging population and buyers are looking for new ways to share the large mortgage payments. I just assisted some clients with their rural Stittsville purchase and I thought I would share our experience.
The first thing to know is that it is hard to find this style of housing, especially with the in-law suite in a non-basement situation. My clients and I searched quite a bit in Kanata/ Stittsville area for this in-law suite option but came up empty-handed. Since nothing came available we considered a new build. By going in this direction my clients would have the opportunity to get exactly what they wanted.
CUSTOM IN LAW SUITE
To purchase new you must do your research. We worked with a local custom home builder that has a good reputation. My clients had them build a beautiful bungalow with a 1000 square foot in-law suite. It is really more like a small bungalow attached to a larger one. It really is quite unique and that’s what is so great about custom building, you can get exactly what you want. The curb appeal turned out awesome. In the picture, you can see the in-law suite on the far right-hand side.
What is really unique about this home is there are two separate entrances and no shared walls. Both homes were so well finished and turned out amazing. I got to take a tour of them once it was all finished. I think if you are considering going this route you should think about going new.
To get to this point there is a lot to consider:
1) Research potential custom home builders/ Get feedback from current and past clients
2) Interview 3-4 builders
3) Confirm Tarion warranty status and see if there are any claims against them
4) Find a lot (carefully review restrictive covenants of lot)
5) Have multiple meetings to make sure you and the builder on the same page
As a Realtor, I am very much involved in this process from start to finish. Should you want more information about this option let me know.
We are excited to be hosting our 3rd annualSantaParty!
We will have a professional photographer on hand and a very special guest (kids will be excited). A nice alternative to meet Santa without all the long lines at the mall. There will also be presents for the kids, face painting, crafts, and refreshments will be served.
Please let us know if you will be joining us for this wonderful holiday event. Please RSVP by November 20th by sending us an email. Likely this event will fill up fast. Reserve your spot. We look forward to hearing from you!
The Ottawa housing market results are in and the numbers for the average sale prices are up again month over month. Our average price for a residential-class property was up 8.6% over last October, sitting at $425,256. The condos are up 6.9% sitting at $269,604.
Units sold cooled a little in the condo market last month as for the first time in awhile they dropped well below the double-digit mark. 261 Condo units were sold last month compared to 255 in October 2016.
All in all, this has been another very active month for Ottawa real estate Look at the increases in the home prices. Really surprising to see such big numbers over last year. Nobody predicted this. There is some concern that the new mortgage rules will cool that early in 2018. I am not so sure it will have a big impact on Ottawa. For the most part Ottawa, home buyers are more conservative than say Vancouver or Toronto buyers when it comes to how much of their income they put towards real estate. Buyers will end up affording about 20% less in purchase price with the new rules. It will force people to stay within their comfort zone in terms of what they purchase. Might slow things slightly short term but in the long run, it will ensure that we continue to have a healthy balanced real estate market in Ottawa.
