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