Ottawa-Gatineau Housing Market
 

http://www.obj.ca/Real-Estate/Reside...state-market/1

Decline continues and this is before many of the new buildings begin occupancy and with mortgage rates still at record lows. Prices down 3% and nothing I see is moving at all. I think at current prices and growth forecasts all small time investors must be out (or at least the smart ones). I follow byward market condos closely and nothing moving and some large price cuts on many.

And blaming the weather for three months in a row is plain stupid, especially given that Toronto is up so much. Ottawa's economy is stagnating.

The local commercial real estate scene has also seen a recent drop.

http://www.obj.ca/Real-Estate/Non-re...s-drop-31%25/1

I am surprised to hear the average price for a detached home in TO is almost $1 mil. Who's buying these properties? Developers or wealthy foreigners?

Unwealthy Canadians taking out huge mortgages.

Probably mostly middle class two-income couples making around $100K each who have a $100-$200K down-payment from what they made on their condo (s). An $800K mortgage is big, but not huge at this income level. It is equivalent to a one income family at the same income level with a $400K mortgage.

Just look at HGTV for a couple of hours and you will see who they are...young "professional" couples who are mortgaged up the ying-yang or 30 somethings who are finally moving out of their parents house with a huge downpayment (saved or gifted, who knows)

I swear, it's the same types of people buying in the same types of neighbourhoods in every show on HGTV

There is money in TO. People don't realize how crappy the economy in Ottawa is. It is a government town and I think we have seen the peak of the good times for public servants. And unlike TO we have mostly local investors and very little overseas money (mostly Chinese) looking for a safe haven. To also offers growth potential because it is private sector town, again not the case in Ottawa where public servants face stagnation at best.

That's a good thing though, it keeps housing affordable in Ottawa. How the hell is $1 million dollar home prices good for anyone??? I've never understood why the media treats slow-rising home prices as some sort of disaster. Falling is bad for existing owners, but stagnant/slowly rising home prices are best for all involved.

$100K personal income is NOT middle class. That's rich. Making that much means you're in the wealthiest 5% of the country.

The average Canadian makes $36k a year.

Too lazy to look this up, but I think your figure is average income. I think that the average working Canadian makes something like 50-60k.

Sorry to burst your bubble, but the average is $48K.

http://www.workopolis.com/content/ad...ges-right-now/

Actually more than 25% of Toronto households make more than $100,000. So it might be upper middle class but it is not rich.

Because housing is an extremely important part of the economy and usually signals its health. Rising prices means rising wealth, equity that is transformed into new purchases. New housing starts means new construction, new infrastructure, new furniture, fees for real estate agents, lawyers, etc.... That is one of reasons interest rates remain so low. The fact that they are still so slow and office and residential RE is still declining is a serious sign of a weak economy.

And 100,000 is not rich. Maybe in the 1970s. Look at what entry level salaries are for US law firms or google for 22 year old engineers. 100,000 is an ok entry level salary for the best and brightest.

25% of households. For a double-income couple that comes out to $50k per person.

$100k per person is ~95% percentile. That qualifies as rich.

I sit corrected. But $48K is still much lower than $100K.

But if price growth exceeds growth in average salaries, it makes it harder for younger people and the lower-income folks to enter the housing market. Skyrocketing housing prices create a huge generational inequity as it means the young can't find the same quality of housing that their parents did.

A healthy society is one in which the standard of living of its people increases over time. If the percentage of citizens who can afford to own their home decreases over time (or if the quality of homes they can buy also decreases), it's a sign of an unhealthy society.

This is an Ottawa perspective. You missed my bit about 22-year old new graduates making massive coin. In places like San Fran it is the opposite and it is the youth pushing out the old folks. This is the new economy. Ottawa most certainly is not and has no industry that attracts the best and brightest who flock to innovation centers like NYC, San Fran and to a lesser extent Toronto. And if you think houses are unaffordable now, what happens when mortgage rates go up? I don't think this can happen for a decade as it would destroy wealth in our country.

http://sf.curbed.com/archives/2014/0...g_the_city.php

That isn't an Ottawa perspective at all. House prices outpacing salary growth is actually a bigger concern in Toronto and Vancouver. Just look at the ratio of average house prices to average salary in those cities. It's far worse than is the case in Ottawa. That's partly because in both of those places, it's nowhere near the majority of youth who are making those big dollars.

The fact that a large proportion of household wealth is tied up in people's homes, and that the economy is becoming too dependent on housing sector growth is a very real concern from an economic perspective. Paper wealth in the form of house prices does not necessarily equate to a healthy economy. The numerous housing crashes that have happened around the world in recent years are examples of that.

declaring the top 5% "rich" is a little generous.. 100k is hardly rich though the idea of 100k being some high salary is very "ottawa" IMO..

talk to anyone in technology, consulting, law, finance, medicine, real estate (i could go on) and 100k is just another mile marker in your career..

another thing, has anyone seen the length of the sunshine list these days?

the idea of 100K NOT being a high salary is very "Toronto"... IMHO...

In terms of Real Estate family income is what is important. In Toronto even above $200K per family we are talking about a lot of families. In 2011 (would certainly be higher now) about 130,000 couples in Toronto made more than $200K (out of 1.3 Million couples (including where only one person works) so that is top 10% which is certainly upper middle class but I wouldn't say rich.

For comparison in Ottawa the ratio is even higher at 12% of couples making more than $200K.

I don't disagree with you, I was just trying to put the notion of "Developers or wealthy foreigners?" to bed...because the young couples buying these $1 million+ homes are neither developers or foreigners

My dad made over $100k before he got laid off, I can definitely tell you that we weren't rich, not in this economy.

A lot of people in my company make $100k+, but I'd consider only a handful of them to be on the high end of upper middle class and I wouldn't classify any of them as being "rich".

What would you guys/gals consider a good retirement income?

Given house paid, kids independant, no work related costs.

Do you think you could live comfortably on $40K a year? :shrug:

Personally? No. Something like 50-60K a year would be more ideal for the following reasons:

-increasing costs of medicine
-treatment, hospitalizations, etc.
-assume still able to drive, so car-related costs. Go up for each vehicle.
-house troubles (pests, flooding, damage/repairs, etc.)
-inflation drives the cost of everything up.

We are super off-topic, but let me blow your minds: http://www.mrmoneymustache.com/

Lot’ s of factors to consider so almost impossible to answer with a magic number. Are you talking $40,000 in today’s dollars or a inflation protected pension?

Current income is an important consideration. If pre-retirement income is $200K it is probably not nearly enough if it’s $50K you could probably live on $30,000.

Travel and personal care are two things that can quickly eat up a fixed income. Your estimate of your desire/need for these will be important.

Where is that statistic coming from? Seems high to me, but Ottawa does have a very high average income.

StatsCan’s site lets you break down income bands by hundreds of variables including family composition, city etc.

http://www5.statcan.gc.ca/cansim/home-accueil?lang=eng

It is easy to use and takes a few minutes to drill down and get what you are looking for.

e.g.

In 2011 in Ottawa CMA (Ontario part) there were 215,000 couple families (a couple living at the same address with or without children)

Making more than
$100,000 there were 115,900
$150,000 there were 59,640
$200,000 there were 26,740
$250,000 there were 12,750
Median total income $106,230

I was surprised Ottawa had more $200K+ than Toronto too. I would guess $300K+ is much more common in Toronto.

Thanks for that. Very interesting numbers.

I think you are right about Toronto having far more on the very high end.

If you got rid of your cars, then yes, it should be fine. I currently make $41k a year and that's enough to pay all my living expenses plus have almost $10k a year left over to save. I live modestly, take transit (no car), bargain hunt for groceries, and don't travel.

Damn, this is not pretty

The number of new homes under construction fell drastically in April as builders reacted to plummeting demand for condominium units.

According to Canada Mortgage and Housing Corp. (CMHC), homebuilders began construction on 253 new residential units in April, down 50.9 per cent from the 515 they began building during the same month in 2013.

Almost all of that drop can be attributed to reduced condominium construction. CMHC said builders only began construction on 34 apartment units, which includes condominiums. In April 2013, builders started construction on a total of 301 apartment units.

“I can tell you that 85 per cent to 90 per cent of the apartments are condomiums,” said Sandra Pérez-Torres, senior market analyst with CMHC. “We have had so many apartment starts in the last two years. The market is just cooling down now. We’re seeing so few starts that it’s just cooling the whole market.”

A similar pattern is being seen in the resale market for the once white-hot condominium scene. So far this year, 823 condominiums have been sold, down 9.7 per cent from the 911 condo units sold during the first four months of 2013.

Read rest of article in the link below.

http://www.ottawacitizen.com/busines...611/story.html

Oddly enough, house prices are at a new peak in Ottawa. The condo boom is coming to an end. There will be a lot of projects that will be halted.

What happens to housing is the next question.

The CMHC forecast is for single family housing to be pretty stable and rows and townhouses to show modest growth over the next few years. Yes, apartments are forecast to be down, but that is from a few record years. They are projected to remain well above historical averages.

I just hope the Fed doesn't cut any more public servants job or take any drastic cost-cutting measures...I do agree with TOExpat earlier, this is primarily a government town...there are some bright spots in the hi-tech scene (Shopify, General Dynamics, Mitel etc) but suffice to say, it's nowhere the same as 1999 where Nortel and JDS Uniphase practically gave jobs to anyone off the street.

I guess the provincial election in a month's time and to a bigger extent the federal election in 15 months are something to keep an eye out for. I don't think the interest rates will go up anytime soon.

Sort of makes you wonder who is going to shop at all these new/bigger shopping malls, drink at all these new brew pubs, etc.

It is not just cuts that are a concern. The slowing/freeze in hiring is almost more devastating to the condo market. I own a few rentals and 5 years ago could always count on hordes of new grads making $60K+ just starting a government job to be eager for $1500 a month condos. That has dried up. The rental market is brutal right now especially in this medium price range.

That's right. The budget freeze is continuing for at least a year or two more, which will impact hiring dramatically. That is the biggest drag on the market here.

Tim Hudak promises to eliminate 100K public servants (provincial) job, if elected.

I know Ottawa does not have as many provincial public servants as federal or municipal but this does not sound very re-assuring, at least for the housing market. There will no doubt be a ripple effect, if that comes to fruition.

The pledge seems to include teachers, health care workers, etc., as well, so it would cover everywhere.

the 100k+ public servants in ottawa? the countless federal pensioners? the 60k university students?

this isn't detroit.

100K public servants... like... politicians maybe? How about CEO of crown corporation making big "performance" bonuses when they're actually in a huge hole? How about the decision makers that couldn't come up with a good idea if it bit them in the ass?

As for the NCC moving back to Wellington; the 2011 move to WEP was only temporary during renovations of the other building.

:drummer:

Is a single new idea really too much to ask for?

"Will it mean fewer teachers? It does," Mr. Hudak said answering his own question. We'll hire more nurses, we'll keep our police officers, but it will mean fewer teachers in our system."

"Mr. Hudak said it's too late to kill full-day kindergarten, the $1.5-billion a year program that will be fully implemented across Ontario this fall, but he would change it so there's no longer both a teacher and an early childhood educator in the class at the same time."


I hadn't really looked at the details until this came up here. This guy is a complete idiot. There are 30 kids in those classes. I'm pretty sure all of the research indicates that one teacher handling 30 4-year olds is the best recipe for educational success.

His honesty is actually refreshing.

Currently in each class there is one certified teacher, making up to $90K and one Early Childhood Educator who make less than $30K (and often much less).

I would think 3 or 4 ECE's, which is more the standard in current private pre-schools, would be more effective and be much cheaper.

surely, certified ECEs would only make less than $30K a year because they're working part time, no? (e.g., in after school programs, and special programs for PD days and summer camps and the like?)

Refreshing? This is Mike Harris 2.0. Perhaps you are too young to remember the divisiveness of these types of politics, but believe me, they didn't work then, and they won't work any better now.

So I take it that you are suggesting that there is no value in having a qualified teacher in these classes? That's definitely a new one. You're basically proposing that publicly-funded day care replace school for 4 and 5 year olds. This while everywhere else in the developed world is pushing the school age lower, which is consistent with the evidence that an earlier start is critical to better educational outcomes.

That's the problem with these ideas. They are presented as "common sense" to suck less engaged voters in, but they are actually so superficial that they don't stand up to even the most basic scrutiny.

By the way, using your numbers, 4 ECEs would cost the same amount as the current set up. So even the math doesn't work.

I don't necessarily agree with or especially trust that they will follow through with their plan, but I would prefer more caregivers and/or smaller classes than someone who is "certified". Some of the top education performers worldwide start "school" later but have universal preschool from a younger age. While 4 might be break-even and 3 would offer significant savings, it sounds more like Hudak is talking about keeping 2 caregivers. I bet they end up cancelling this year's implementation all together if they get elected.

Well, as someone who has a child in full day kindergarden, I can tell you that there is a huge difference between a qualified teacher and an ECE. Which you might expect, given that teachers have much higher entrance standards, education requirements and professional obligations. Your characterization of "caregiver" is accurate in the case of an ECE, but not in the case of teachers.

You've got to remember that we have had JK in place for many years. To pull a teacher out of those classes and essentially delay the start of school for two years is a big downgrade in the quality of our education system.

To cancel this year's implementation would be political dynamite. How could they possibly explain that decision to the areas that miss out?

^ Certified teachers are there to teach, not to babysit. Hiring an ECE instead of a teacher is counter-productive. If the point is simply to save money, hire 2 or 3 babysitters and there you go, the problem (according to Hudak) is solved. Although, the Government shouldn't be spending money to babysit everyone's kid, they should be spending to EDUCATE everyone's kid...

How anyone in their right mind can support this new 100k bullshit, I have no clue.

100,000 people. That's 1/7 of the entire provincial workforce, that includes everybody from cops to firefighters to doctors to nurses to teachers to professors to researchers to social workers to psychologists. That move would do absolutely nothing to balance the budget. Eliminating so many well paying jobs would kill the economy, plus create huge social problems that would make all our current problems seem like a breeze.

And this coming from the exact same man who promises to create 1 million jobs. Yes, because it's totally mathematically possible to create jobs by destroying jobs:koko:

As the Globe pointed out, he'll now need to create 1.1 million jobs.