Moving to Ottawa? some things to know about real estate

ottawa-tulips-and-peace-tower

Average house prices mostly a bargain:
Those moving from the GTA or Vancouver will view overall Ottawa average prices (average residential selling price approx. $400,000) as a real bargain and that would be correct. Averages are just averages though and price ranges vary considerably across the city and the Ottawa real estate board reporting area. Urban residential price averages in 2016 were in the $600-$750K ranges and topped $1.2 million in Rockcliffe Village.

Geography:
Ottawa is quite spread out east to west along the Ottawa river some 45 km (Carp Rd to Trim) and about half that distance north-south. Dominate features include the Ottawa and Rideau River systems, the Rideau Canal and the “Greenbelt”, all of which have factored in Ottawa’s development. North of the Ottawa river is western Quebec, the Gatineau hills and the city of Gatineau. Realtors must be separately licenced/registered to practice in Quebec, so very few, if any, can provide services on both sides of the Ottawa River. Average prices are about $100,000 less on the Quebec side, so buyers should determine which province is of most interest from the beginning of their search.

Big difference between urban and suburban living:
Much of Ottawa’s residential growth over the last couple of decades has been at the fringes in the east (Orleans), west (Kanata and Stittsville) and south. (southwest in Barrhaven and southeast in Findlay Creek and Riverside South) Home prices have increased most in urban areas and this has fostered many condo developments and infill housing development in the highest urban demand areas.  We currently have several of the largest mixed residential urban neighbourhood projects in Ottawa history underway or planned.  These include: Wateridge, LeBreton, Greystone and Zibi plus numerous large (and tall!) condo projects.

High demand urban areas:
Westboro/Wellington West and Carling/Woodroffe area , Hintonburg/Mechanicsville, Civic Hospital, Glebe, Old Ottawa South, Ottawa East, Manor Park, New Edinburgh, Sandy Hill

Students, Students, everywhere!
Ottawa is a big education centre with over 80,000 full time post-secondary students (140,000+ counting part time) at University of Ottawa, Carleton, Algonquin, Cite Collegiale and St. Paul’s. This demographic has an impact on housing, entertainment, dining and the work force.

Transit oriented:
Ottawa has always been a transit oriented city with commuter ridership % among the highest in North America. The OC Transpo system has been built on a mix of dedicated transitways (bus only roads) and express bus lanes which connect urban and suburban commuters with the downtown core.

2018 brings Phase 1 of Ottawa’s LRT (Confederation line) which will connect 13 stations over 12.5 KM, including a 2.5KM tunnel underneath the downtown core. Phase 2 will expand the scope both east, west and south (Trillium Line) by 2023.

This has created a “transit oriented development” focus for city planners and a great deal of activity is planned around LRT transit hubs.

Greenbelt:
When one drives through Ottawa from the downtown towards the suburbs, the city seems to stop and then restart after large swathes of open space. This was created way back in the day when the original plan was to keep Ottawa within the borders of this “Greenbelt”.  Over time, persuasive developers found a way to build new communities beyond the Greenbelt and this is where much growth has taken place since the 1970’s.

Schools:
We have a gamut of schools at the elementary and high school level encompassing English, French and immersion programs from public, Catholic and French school boards. The widespread geography of Ottawa has become a bit of a problem in this regard, as demographics have changed school enrollment patterns and many schools are on the “to be closed” list due to lack of students while others are overloaded and still others have no local services at all.  Researching schools for both current and future requirements can be a key factor for many parents, so it is a good idea to review this early in your Ottawa home search to determine your geographic focus.

Real estate is local:
Every market is different, so be careful not to assume that things in Ottawa real estate will be the same as the market you are moving from. Housing types/styles, trends and key features and highest demand items in one local market may vary widely from those in another.

If you are relocating and looking for an experienced brokerage team to consult on your home or condo buying plans, we are more than happy to help! Give us a call at 613-435-4692 or check us out online at our co-ordinates below:

Gord McCormick, Broker of Record
Dawn Davey, Broker
Oasis Realty Brokerage
613-435-4692 or mobile 613-371-9691
oasisrealty@rogers.com
oasisrealtyottawa.com

One of the highest ranked and “liked” real estate pages on facebook:
http://www.facebook.com/pages/Oasis-Realty-Brokerage-Ottawa/209265863918

Follow us on Twitter for “all the real estate news that’s fit to post”  https://twitter.com/OasisrealtyOTT

One of Ottawa’s best real estate blogs: http://blog.oasisrealtyottawa.com/

When is the best time to list my Ottawa property?

Here is a chart we have compiled from monthly Ottawa real estate board published unit sales results (residential and condo property unit sales/month) for the last 5 years. This demonstrates a pretty consistent annual pattern in the Ottawa market.

Spring is key:
April through June are typically our peak sales months and this will come as no surprise for most. Government employees are relocating and families looking for a summer closing and move before the next school year, give this season a major boost.  Each year Ottawa real estate handles some 800-1000 moves in to town by government personnel with an equal number moving away from Ottawa.  The highest % of these are military and RCMP relocations.

Summer surprisingly strong:
There is a significant myth that “real estate is dead in summer” and this table shows this is totally incorrect! July and August are typically the 4th and 5th busiest sales months of the year, so those who “wait until the market picks up in the Fall” are really doing themselves a disservice.

March, September and October:
These are “shoulder” or transition sales months. March activity is increasing for the busy spring and September and October are marked by erosion of peak demand heading in to the slower fall and winter season.

November-February:
Ottawa sales take a breather, as fewer people want to move during the winter time and seasonal vacations, holiday activity and weather all play a role in making house buying not quite as active. A lot of planning and preparation for the peak season can be done during January and February, so still an active period-just not as many sales.

Personal Objectives most important:
What dictates selling or buying times is often based on a specific property being available and this then drives the sale of an existing home. Those with homes to sell will want to consider their buying and closing timelines in a way that optimizes selling an existing property if at all possible. For example, buying a new home that closes in February means one is selling an existing property in late fall in order to co-ordinate the new home purchase.  This however, is not the best-selling market for the existing property-so the seller will have to take this in to account when doing their pricing and listing plans.

When will my property show best?
Most properties will not show their best until mid-May when leaves are on the trees and everything has “greened up”, so some may wish to time their listing (and photo) plans accordingly. For example, a house with a pool will look much more inviting when the pool is open and warmer temperatures occur.

Is my property ready to list?
It can take longer than one thinks to get a property in HGTV condition for listing and selling, so this must be planned in to the listing cycle.

Competition also a factor:
The quality and number of head to head competitors to the property being sold (both new and resale) also factors in to the timing decision.

How long will it take my property to sell?
Sellers will have to factor in both selling and closing time in to the planning timeline and these can vary widely by location, price point and property type.

Bottom line:
There are a lot of variables to be considering in the listing, marketing and selling process and your Realtor is best equipped to help facilitate the process and optimize results based on all these factors. If one is planning a purchase or sale this year, January and February are the ideal months to sit down and have a planning discussion with your Realtor and any other key 3rd parties ie mortgage broker, stager, trades people.

If you are not already working with another Realtor, we are happy to provide a no cost, no obligation market evaluation of your property to help you with your real estate objectives.

Gord McCormick, Broker of Record
Dawn Davey, Broker
Oasis Realty Brokerage
613-435-4692 or mobile 613-371-9691
oasisrealty@rogers.com
oasisrealtyottawa.com
One of the highest ranked and “liked” real estate pages on facebook:
http://www.facebook.com/pages/Oasis-Realty-Brokerage-Ottawa/209265863918

Follow us on Twitter for “all the real estate news that’s fit to post”  https://twitter.com/OasisrealtyOTT

One of Ottawa’s best real estate blogs: http://blog.oasisrealtyottawa.com/

Fed/Brookfield IRP contract cuts Realtor commission to 3.7%

for-sale…does this cause a risk to those selling to relocate?

The federal government is cutting commission rates for Realtor services on the National Integrated Relocation contract (IRP) and Ontario Realtors will share a total of 3.7% for listing and selling a relocating government employee’s home, as of January 1, 2017. (down from the previous rate of 4.1%)

While some will cheer the move, it may not be quite so popular with relocating employees if they see a decrease in service levels or lower buyer agent interest in their listings, due to the lower compensation offered.

What are typical real estate commissions?
In Ottawa, typical commissions remain around 5%* with 2.5% going to the listing sales person and brokerage and 2.5% going to the agent and brokerage that represent the buyer. Commissions are highly competitive and are open to negotiation but most typical fees will be in this general area.* commissions are negotiable and can vary by the individual salesperson or broker and many do charge less, including Oasis Realty.

How does it work with the Federal relocation contract?
Brookfield Relocation Services (affiliated with the parent company of Royal Lepage real estate) manages the federal government Integrated Relocation Program (IRP) nationally and has done for many years. Just a few years ago, this program paid Ottawa Realtors 5% with the usual 2.5%/2.5% split.  On the last contract this dropped to 4.1%, with listing and buyer agents each receiving 2.05% over the last few years. (a decrease of 18%)

With the new fee/compensation structure coming January 1st at 3.7%, the listing representative and buyer representative will each receive 1.85%, if the 50/50 split continues (a further decrease of 9.7%)

Toronto is not Ontario and real estate is “local”:
We are not sure how these fees are established or negotiated but we strongly believe that “one size does not fit all” in real estate fees and by having one set fee for all of Ontario, this does not take in to account the vast regional and local differences. Toronto is its own market, as is Ottawa.  Smaller but important centres for Federal employees such as Trenton, Petawawa etc. may have an even bigger problem if their local prices and volume of transactions normally requires 6% fees to support.

While Toronto prices have continued on the elevator ride up to atmospheric levels, our prices in Ottawa have certainly not followed suit and even this year with solid unit sales our average prices continue to be pretty flat and at or below inflation level. So Realtors are not making up the difference in the average price of houses being sold here, as they might be in Toronto.

What risks might a relocating government seller be facing?
1) fewer Realtors may be interested in listing properties on the program, given the compensation level.
2) Realtors may also ask employees to “top up” the government paid fees, so they can achieve their usual %. This happens regularly today with those selling or buying a private listing or FSBO where a significantly lower commission rate is offered to a buyer representative.  The standard Buyer Representation Agreement signed by most buyers provides for the buyer paying incremental Realtor commission if the seller does not pay an agreed upon fee level ie 2.5%.
3) If one believes that Realtors are significantly “coin operated” then sellers may also see less interest from buyer agents in their properties, as those representatives may favour properties where the buyer representative commission is more robust. Getting paid 27.7% more on property “B” than government listed property “A” is a pretty compelling advantage.  This amounts to about $2,600 on the average $400K sale or purchase.
4) Listing agents will certainly have less budget monies for advertising and other costs to support their government listings when one considers they are also splitting commissions with their brokerage.
5) properties may take longer to sell if satisfactory “full commission” alternatives are available.

Bottom line:
Government employee sales will continue but there may be a few service wrinkles given the now “discount” fees being paid by the Federal government.

This commission change was hotly debated on a Realtor forum late in 2016, before the Board moderator cut off discussion on the issue, so there are clearly many who feel that this lower rate combined with their brokerage splits, dues/fees and other expenses makes this business less viable for them.

Oasis Realty Enhanced IRP Listing offer for government sellers!

We will offer a 2.5% co-operating buyer representative rate out of the 3.7% contract commission and this will ensure that the listing is on competitive ground with other listings in the area.  Since all Realtors can manage with a 2.5% buyer rep commission there is zero worry for the seller!
Any relocating government employee who has concerns should know we have a program that will totally eliminate any potential risk and in fact, will help make their property even more attractive. For details on our program or for a no cost, no obligation evaluation of your property, please give us a call at 613-435-4692 (not intended to solicit those with existing representation agreements)

Gord McCormick, Broker of Record
Dawn Davey, Broker
Oasis Realty Brokerage
613-435-4692 or mobile 613-371-9691
oasisrealty@rogers.com oasisrealtyottawa.com

One of the highest ranked and “liked” real estate pages on facebook:

http://www.facebook.com/pages/Oasis-Realty-Brokerage-Ottawa/209265863918
For “all the real estate news that’s fit to post”  https://twitter.com/OasisrealtyOTT

One of Ottawa’s best real estate blogs: http://blog.oasisrealtyottawa.com/

 

Key issues for Ottawa real estate 2017

6723-ptw-summer-aaaThe New Year brings optimism and while we expect another pretty good year in Ottawa real estate there are still a lot of questions and issues that will shape our marketplace and affect buying and selling plans. Here are a few we think worth watching:

Listing inventory levels:
We had a positive turnaround in 2016 with fewer new listings and total listing levels, after a couple of years of historical records and bloated excess listing inventory . This helped get the market back to a “balanced” market territory in 2016 but just barely.  Positive unit sales growth would continue this improvement but a small slip could put us back in buyer’s market territory.

Mortgage rates and qualifying rules:
While there is no reason to suspect significant change in mortgage rates, the mortgage rules and new qualifications may delay first time buyers entering the market. The 4.64% mortgage qualifying rate (vs market rates approx. 2% lower) makes the approval threshold higher for buyers and if this source of new market entrants slows, then “move up” sellers have fewer prospects for their property.  Further government moves may also impact the market.

How long does it take the average house to sell?
This is another key indicator on the health of the overall market and it has been going the wrong way for several years now. 2016 (November) year to date the average home has taken 55 days to sell and the average condo 70 days. These compare to 34 days and 27 days, as recently as 2010.
Chronic listings have taken even longer to sell and our newer indicator for CDOM (cumulative-days-on-market) currently stands at 85 days for residential and 112 days for the average condo sale.

New home construction activity and performance:
New home sales were up 15-20% during 2016 after an “off” year in 2015…will this continue? Will this cause a backlog of new home buyers with existing homes to resell thus inflating competition in the resale market?
Many of the marquis new developments are inside the Greenbelt in places like Ottawa East (Greystone), Zibi/Lebreton and Wateridge (former Rockcliffe base). Will these higher end developments draw buyers in sufficient numbers and will that impact suburban sales?
How will the condo market perform in 2017? We have no shortage of projects…are there enough buyers?
With a lot of purpose built rentals coming in the future, (i.e. Lincoln Fields/Westgate/Elmvale), will these challenge investor buyers and owners with increased competition in the rental market?

How will governments impact our market this year?
We are a government town and it is no surprise that our market perked up with the 2016 fiscal year starting in April last year. After several years in the doldrums and tight Federal spending, we had increased spending and headcount and a positive environment with the new government which contributed to improved results.

The provincial and municipal governments have been pretty supportive too; abandoning some measures (increased land transfer taxes, higher development fees) and lots of cash for major infrastructure (LRT, sewer upgrades) and general maintenance.
The Province has upped the land transfer tax rebate limit for first time buyers to $4,000 from $2,000, so that is a plus for 2017.
Will the Feds take further action nationally to attempt to “cool” the super charged Toronto/Southwestern Ontario market? Will the federal National Housing Strategy complicate the nature of local real estate?

Will the Province bring in the long awaited Home Energy Rating and Disclosure Program this year? This program will force home energy audits prior to listing a home for sale and the “energy score” will be published on MLS® listings.  This may hurt older generations of homes/homeowners and result in market challenges for these sellers.

Will ongoing increases in utility costs negatively impact some homes/properties more than others?

Higher utility costs are felt most by the 45,000 Ottawa area homes serviced by Hydro One, so will further increases impact sales for these homeowners?

Will the Province and/or the Feds follow BC’s lead and create a matching interest free loan to help first time buyers?

Will our market roar ahead to catch up with much higher price valuations in the rest of southern Ontario? Ottawa has not been participating in the house price increases of other major centres in Ontario over the last 4 or 5 years.  Could this be the year we play “catch up”?

Our take:
We don’t see a lot of new significant or contentious action from either Provincial or Federal governments, as both await the outcome of the Cap and Trade/Carbon Tax program and the host of new mortgage rules. Federal funds should continue to flow and we can see some slightly better average price increases but still probably only inflation level or slightly better.

If you do not have a Realtor helping with your buying/selling plans, now is a great time to sit down and plan, as peak season starts in only a few weeks!   If you do not have a Realtor, feel free to give us a call! 613-435-4692 or follow us on social media to keep an eye on Ottawa real estate…it should be an exciting year!

Gord McCormick, Broker of Record
Dawn Davey, Broker
Oasis Realty Brokerage
oasisrealty@rogers.com www.oasisrealtyottawa.com

https://www.facebook.com/oasisrealtyottawa/

@oasisrealtyOTT

http://blog.oasisrealtyottawa.com/