Ottawa’s real estate market ended 2014 on a flat note—with a slight increase in the number of sales of residential properties and a 7.2 per cent drop in condo sales—and that steady but plain tune is likely to keep playing until at least 2016, according to the Canada Mortgage and Housing Corporation (CMHC).
“CMHC is forecasting that 2015 and 2016 will continue to be relatively quiet in Ottawa, with a one per cent increase in the average sale price each year,” notes Patrick Morris. “This is a good thing compared with Calgary, where they’re expecting a huge drop.” Ottawa’s Western counterpart has already experienced a huge drop in the number of home sales as a result of decreasing oil prices.
Ottawa’s real estate market, by comparison, has been resilient, if lacklustre.
According to the Ottawa Real Estate Board (OREB), the average sale price of a home in 2014 (including both residential and condominium properties) was $361,712, an increase of 1.2 per cent over 2013. The number of residential properties (excluding condos) sold last year in Ottawa rose by 2.4 per cent, to 11,267. “CMHC considers that a very static year,” observes Patrick. “The average sale price of a residential property didn’t even hit a one per cent increase over 2013—just 0.8 per cent higher. So 2014 was really a flat, ho-hum kind of market.”
As for condominiums, the number of sales in Ottawa last year fell by 7.2 per cent over 2013. There continues to be a large inventory of condos for sale, with a surfeit of new condos hitting the market. On the plus side, says Patrick, the average condo sale price increased by 0.3 per cent in 2014, to $263,518. “That’s positive for condos, because their average price was dropping steadily. It was good to see a slight improvement for last year.”
CMHC’s figures show that Ottawa remains a relatively affordable market compared with Toronto, Calgary and Vancouver.
Patrick points out that 51 per cent of all Ottawa residential property sales in 2014 were between $250,000 and $400,000. “That’s a lot of sales in this range. The rest of the price ranges were divvied up.” For condominiums, the most popular price was between $300,000 and $400,000—similar to 2013.
“What’s also interesting,” adds Patrick, “is that it took 8.3 per cent longer to sell the average house last year than in 2013. Condos took 18 per cent longer, and income properties took 42 per cent longer to sell.” Looking at the difference in length of time to sell income properties, Patrick explains, “A lot of income owners had really high expectations as far as price goes. But buyers are smart. They use the capitalization rate, and if the cap rate doesn’t fall within the financial acceptance level, they don’t buy.”
People of all ages and walks of life are buying condos for the lifestyle they offer - that is, leaving the snow shovelling and lawn mowing to someone else, and being able to turn the key and go away for six months without having any worries (in most cases).
Other advantages to condo living include: amenities such as enhanced security features (e.g., a security guard, entry buzzers), swimming pool, sauna, theatre room, and exercise and party rooms; the ability to participate in the running of the condominium corporation; and a readymade community that offers social and recreational activities.
Of course, condo living presents a different affordability because of the monthly condo fees. In some of the condo high-rises, the fees can be quite high. Sometimes, there are special assessments for unbudgeted expenses, which can hit a five-year-old building just as well as a 50-year-old building; if the condo board runs over budget, or if the reserve fund can’t cover the cost of expenses, the condo owners pay a special assessment—their equal share of the shortfall.
This is why doing your homework before buying is essential. A track record of frequent special assessments tells you right away that the reserve fund is poor.
All that said, the return of having a more carefree lifestyle is making condo living a popular choice among people from every age group, whether young professionals, single parents, or the newly retired.
We are frequently asked what home improvements have the best return on investment. Every year Remodelling magazine and the National Association of Realtors combine their resources to provide an annual report comparing the actual cost of a project and the homeowners return on investment. Here are the highlights of the annual 2014-15 Cost vs Value Report. If you’re thinking of remodeling or adding onto your house the following returns on your costs should help you with your decision making.
In a real estate transaction, the “cost recouped” for a remodeling project depends on a variety of factors. These include the home’s layout, the quality of finishes, the condition of the rest of the property, the value of similar homes nearby, supply and demand in the neighbourhood and the property’s specific location.
High Notes for 2014
Patrick and his Team have once again garnered the #1 Position in Ottawa for Royal LePage.
Additionally, they ranked an impressive #18 our to more than 16,000 agents across Canada.
Congratulations on your hard work and success!