Ottawa Real Estate Statistics - June 2016

While Pokemon Go was breaking downloading records, Ottawa real estate was setting a record of its own.  This past June saw 1,985 sales in the month which was the highest number EVER for monthly sales in the Ottawa area!  Compared to June 2015, residential sales increased by 16.6% to 1,654 and condominium sales increased by 21.2% to 331 (not only are these numbers impressive, but purchasers of these homes were also far less likely to get into traffic accidents or fall off cliffs while partaking in this record-breaking trend, which is more than I can say about their Pokemon Go counterparts).

As sales were heating up, we saw a decline in the inventory available in the area; in June 2016 an additional 3,220 new listings were introduced to the market increasing the total number of listings to roughly 8,300 or 11.5% less than this time last year.

With the number of sales increasing and the inventory numbers dropping, the real estate market is returning to levels local Ottawans saw in the 2000's & early parts of 2010's.  For the better part of the last 4 years, Ottawa's real estate market was considered a 'Buyer's Market', meaning the inventory available for sale exceeded the demand.  A few factors contributed to this market change; an over-abundance of new homes and condos, the rise in popularity of 'for sale by owner' companies, and the shifting demands of the market (Baby Boomer's inching closer to retirement, Gen. Y starting families later than their parents, etc...).  But if the current sales pace in maintained and the inventory continues to drop, the local real estate market will quickly shift back to a 'Seller's Market' - which means if you've been putting off the decision to buy your next home or an investment property, now is the time to act before prices start to jump back up.

A First-Time Buyers Guide: How To Get Started

Buying your first home can be scary, but then again doing anything for the first time can be scary.  Remember how nervous you were getting behind the wheel of a car for the first time?  What about first time you asked someone out on a date?  Did you feel 100% confident?  Even if you're Brad Pitt, I'm going to guess the answer is 'no'.  (And if you are Brad Pitt - what's up, Brad? How's Angie and the kids? I loved you in Fight Club & Ocean's 11 & 13 - but what happened with 12?  You guys really dropped the ball on that one.  But I can't talk right now, I have a blog to write - call me later.)

Be it your first or your 15th property, buying a house is a huge step in your life - after all, it's the most expensive thing most of us will buy in our lifetime. Like other milestones, it's completely normal for you to feel a little anxious or uncertain about buying your first home - but just because you have a little anxiety or some uncertainly doesn't mean it's the wrong choice.

If you're a Baby Boomer and you're reading this, your idea of a first-time home buyer is probably someone in their early 20's, fresh out of school, looking to buy a 2- or 3-bedroom home for the family they want to start in the near future.  However, times have changed and first-time home buyers aren't so easily identifiable anymore. Not only have their starting points change significantly, but their needs and wants have changed as well.  I've met new buyers from all walks of life - from 18 years old to well into their 50's; some getting financial aid from their parents and others financing their own purchase; some looking for bachelor apartments in the ByWard Market and others wanting more acreage out in Vars or Carp.  Everyone has a different set circumstances that effect when and if they can buy their first home and what type of home it will be.

One thing I have learned in meeting such a wide variety of first-time buyers is that everyone has similar fears and concerns.  When you were mustering up the courage to ask your crush out on that first date, do you remember all the questions running through your head - What if my breathe is bad?  What if they don't like me?  What if they like someone else instead - like Brad? (Stay out of this Brad! I told you I was busy!)  The point is, we all have fears to overcome when we try something for the first time.  Although some of these fears are more rational than others, but they all have to be dealt with before we can move forward comfortably.

Here's a quick list of the questions or concerns I hear most from first-time buyers....

1. "Renting is easy, owning is hard - I'm a path-of-least-resistance type of person."

As the old adage goes - nothing worth having comes easy, and owning a property of your own is something definitely worth having.  It's true that renting a property is easier than owning - as a renter you might be responsible for a few maintenance items, but generally you can contact your landlord or property manager to take care of most of it. However, being a property owner isn't that difficult and, like anything in life, the more properties you have bought & owned, the easier it becomes.  Plus, as you'll read in a moment, the benefits and advantages far outweigh the time & effort you put into home maintenance. 

Now if you aren't a fan of property maintenance and upkeep (And let's be honest, who really is?  Does anyone actually enjoy cleaning out their gutters or window wells?) There is a great option for you - condominiums!  Condos come in all shapes and sizes - apartment-style condo in towering high-rises (Soho Champagne) or 3- or 4-storey low-rise buildings (Qualicum Woods Crossing), terrace and regular townhouse condos (Hunt Club Towns) and many more.  Regardless of their shape or size, one of the best features about a condo is the maintenance (or lack thereof) that they require - especially the apartment-style condos.  

If you own a free-hold property or non-condominium, as the owner you are responsible for just about everything.  However, if you own a condo you have limited property ownership rights, which means you don't have total freedom to change everything on your property, but it also means you aren't responsible for much of the typical maintenance you would have if you owned a non-condo.  For example, the apartment-style condo I used to live in had a balcony and windows - those were pretty much the only exterior features of the condo and I wasn't responsible for either.  I had exclusive usage rights to the balcony, but if it ever required repairs or maintenance, or the windows had to be cleaned or fixed, the building property manager handled it.  On the inside of the condo, I had to change my furnace filter every 3-6 months but that was it as far as maintenance was concerned.

2. "I don't pay that much in rent, and home ownership costs are about the same - so why would I change?"

If you are a tenant, every rent cheque you pay, each small household item you fix, any payments or improvements to the property made by you goes on to help someone else.  On the other hand, when you own your property, a portion of your mortgage payment, the maintenance and upkeep you put into the home comes back to you in the form of home equity.  Now some of you may be thinking 'Home equi-what? Wait, I don't care.  I only pay $1,300/mo. in rent, I'm sure my costs for owning a home would be about the same or maybe more! So how much further could I get owning a home?’

I'm glad you asked, let me show you... (Try to stay awake, there's some math coming your way).

Meet Owen & Brent.  These best friends are so tight that they just moved into separate 3 bedroom/2 bathroom townhouses next door to each other in suburban Ottawa.  They each spend about $1,300/month + utilities to live in their respective homes.  The only difference - Brent rents his home and Owen owns his home.

At first glance it looks like these two are essentially in the same position - similar houses in the same neighbourhood with the same living costs.  But let's jump into our DeLorean to time-travel ahead 3 years.

After 3 years both Owen & Brent would have spent $54,000 each in living costs - for those keeping a tally: that's $1,500 per month ($1,300 + $200 per month for utilities) for 12 months for 3 years.  Since they both pay the same utilities, let's go ahead and remove that cost from their totals, which brings that number down to $46,800.

In Brent's case that entire $46,800 went to his landlord - aside from a few rent receipts and keeping a roof over his head, Brent has nothing more to show for that money he spent.  When's the last time you spent over $40,000 and hardly had anything to show for it?

In Owen's case, of that $46,800 about $16,000 went back into Owen's pocket. The principle portion of his loan/mortgage was paid down by $16,000, meaning that Owen now has access to that money should he need it.  It's not cash sitting in his chequing or savings bank accounts, but he has access to it if an unforeseen expense comes up.

On the surface both Brent & Owen were paying $15,600 per year, but digging deeper into the numbers Owen was really only spending $10,267 - or one third less than Brent.  I'm not sure about you but when I was a tenant I would have loved to pay one third less in rent.   

3. "The house is nice and all, but it doesn't have everything I want - I'll wait to buy something nicer."

I've heard this a lot unfortunately.  First-time buyers go to their bank and start the process to get pre-approved for a mortgage.  Before they get their pre-approval they start looking at all the beautiful houses on the internet or on reality TV shows and get excited - his & her walk-in closets, new stainless steel appliances, huge master bedrooms looking out over an in-ground pool. When we start to visit properties that actually fit their budget, reality sets in (Whoa, whoa, whoa, are you telling me that reality TV isn't actually reality? Do the Kardashians know about this?).  They become discouraged and unenthusiastic because the homes in their price range don't have the lavish kitchens with granite counters or spa-like ensuite bathrooms like the ones they saw online.  Quickly their discouragement gets the best of them and suddenly staying in their current situation, be it renting or living at home with their parents, seems like the best option.

I'm not here to be a wet blanket, but your first home typically won't look like it could be featured MTV's Cribs. However, there are ways to update and improve any home to better suit your needs and you won't have to eat ramen noodles for a year to afford it.  All it takes is a little imagination, some patience & a hard-working real estate agent.

I bought my first home for less than $200,000.  No, I didn't buy it in 1983 where you could pick up a 4 bedroom home for less than $100,000 - I bought it in 2008.  It was a 40+ year old 3 bedroom/2 bathroom townhouse - practically nothing had been updated since it was built.  I'll be honest, when I first saw the property I wasn't impressed and I couldn't wait to leave.  It had a very dated kitchen with appliances older than me, the paint on the walls was faded & chipping, and the basement looked like the set of the next Criminal Minds episode.  But the home was originally constructed by an up-standing builder, offered a lot of living space, and had other beneficial features such as hardwood floors (albeit they weren't in great shape), newer windows, private rear yard, etc... - it definitely had some potential, you just had to know where to look.

Prior to searching for a house I had already been pre-approved, so I knew I would be able to afford the property - I just didn't want to live in it as-is.  I spoke to the bank about the situation and through some creative financing my banker was able to not only secure a mortgage on the property but also a loan for renovations as well - suddenly that dungeon ummm... I mean, basement and dreadful kitchen weren't as concerning.  We structured the offer to ensure I was able to get the best price and included the necessary conditions so that I was well protected.  We brought in a general contractor to devise a renovation schedule and requested a move-in date so I didn't have to live through the heavy part of the renovations.  Once the offer was accepted I met with an interior designer to finalize the colours I wanted and materials to be used for the renos.  45 days later the property was mine and another 45 days after that the property finally looked like I wanted and I moved in.

Now this is the point where I normally hear "Taylor, you are part of a family-owned real estate brokerage - you have access to all of these great resources, and I don't.  I'm glad you got the home you wanted, but how does this help me?”  It's true, I am part of a family-owned brokerage and I learned a lot about real estate long before I ever thought I would become a real estate agent - but the services, knowledge and list of preferred partners I used to accomplish this home purchase and renovation are exactly what we provide our clients.  

I could have easily waited for that "perfect house"; taking months to tour dozens and dozens of houses, all while throwing money away on rent.  But instead of waiting for that perfect home, I made a home perfect for my needs.  Because I was able to negotiate a low price, even after I paid for the renovations, I still paid less than if I bought a more updated home in the area.  Plus, I got to pick the colour scheme I wanted, I was able to change a few things with the layout to better suit my needs and I discovered the backyard fence was incorrectly erected - my yard was about twice the size that I originally thought.  

When the renovation dust finally settled....

1. I paid much less for my property than my neighbour, even after the renovation costs were added, primarily because I was willing to buy a "dated" home.

2. I was able to select the specific cabinetry, countertops, flooring stain, paint colours, etc... that I wanted.  I was even able to make some changes to improve the layout.  

3) I ultimately sold it at one of the highest sales prices in the area and the money I made on the sale allowed me to buy a newer property that was closer to being my 'dream home'.

4. Buying seems like a big commitment - what if I move to Fiji next month?

Okay, Fiji may be a bit far-fetched, but I often hear these comments about uncertain futures from recent university or college graduates that aren't sure where their lives will take them and they’re apprehensive of planting their roots only to have to start over in a different city.  While some of us may land a job in Europe, Asia or simply another Canadian city, most of us will end up working in the city we grew up in - not to scare you too much but there's actually a good chance you'll end up living with your parents again (If you're lucky they will have kept your Spider-Man bed sheets and let you hang up those Baywatch posters again!).

No matter how much we try to plan our lives, there will always be some uncertainty in our futures.  Even if you took the plunge and bought your first house, only to be offered your dream job in Paris a few days later, with Ottawa's traditionally low rental property vacancy rates that property can easily become a sturdy income-generating rental property for you.  I know it may seem a little unusual for you to live in one country or city and own a home in another, at the Bennett Property Shop we work with many international buyers/investors who have specifically selected to buy a rental property in Ottawa due to the stable economy, low vacant rates, and growing population.

Whether your looking to buy your first home this weekend or just thought about home ownership for the first time a few minutes ago, you want to make sure you're working with an experienced professionals to help make this exciting new life transition as smooth and stress-free as possible - contact the Bennett Pros TODAY 613-233-8606 and take the leap!

Thanks for reading.

Taylor Bennett
Sales Representative - Bennett Property Shop Realty
www.BennettPros.com
Taylor@BennettPros.com
@OttawaTails

Don't have enough money saved for a down payment? SoHo Lisgar Has A Solution

The holiday season is upon us and budgets are tightening up - everyone is looking for the best deals or the hottest sales of the year, and if you're in the market for a new condo, condominium developer Mastercraft Starwood is offering a pretty special and unique promotion to help those that may not have a large ammount of money save for a deposit, something that most new home builders require.  For as little as $5,000 as an initial deposit, you can purchase a brand new luxury condo at their downtown location, SoHo Lisgar.  Here's how it works:

Once you have decided on one of the 13 remaining suites (there are 1 bedroom, 1 bedroom + den, & 2 bedroom condos still available) all you need as a minimum deposit is $5,000 - the regular deposit is 15% due over 90 days.  After 1 year you will need to put down the balance of a 5% deposit combined with evidence of a mortgage that covers the remaining 95% of the purchase price. During that year you will lease the condo from the builder for 1 year at market rent - starting at $1,560/month for 1 bedrooms and $2,150/month for 2 bedrooms.  But here's the catch, half of your rent will be credited towards the balance of the 5% deposit owed.  So effectively, you would be renting a downtown 1 bedroom condo at $780/month or 2 bedroom at $1,075/month!

Let me demonstrate this promotion is greater detail.  For this example I'm going to use SoHo Lisgar's 'D1' plan - a 922 sq. ft. 2 bedroom/2 bathroom condo (you can view the floor plan here).  The purchase price on this particular suite starts at $437,900 (incl. HST), and as I mentioned above, the monthly rent would be $2,150.

Price.......................................................................................$437,900
5% Deposit...............................................................................$21,895  ($437,900 x 5%)
Monthly Rent..............................................................................$2,150
Initial Deposit..............................................................................$5,000
Remaining Balance of 5% Deposit.............................................$16,895  ($21,895 - $5,000)
         Total Rent Paid After 1 Year............................................$25,800  ($2,150 x 12)
         Credit Towards 5% Deposit.............................................$12,900  ($25,800/2)
Remaining Balance of 5% Deposit Due After 1 Year....................$3,995 ($16,895 - $12,900)

Now let's say you are a buyer who's intrigued by this promotion, but that four-letter word scares you: RENT.  Even if half of it is being credited towards your purchase, you still can't stomach handing over a monthly rent cheque.  I can relate, I was raised to believe that renting (a.k.a. paying someone else's mortgage) should be avoided if at all possible.  So, what do you do?  Is this promotion a waste?  Hardly.

The first condo I ever lived in was a 2 bedroom/2 bathroom condo approximately 1,000 sq. ft.  I wasn't into paying a lot of rent, but I needed a roof over my head, so I rented out a room for $900/month, approximately cutting my rent in half (Sound familiar??).  The $900/month I wasn't paying in rent I put away in a savings account that I ultimately used to help fund my next real estate purchase - which is essentially what SoHo is doing with this new promotion.  But let's run the numbers again with this additional income coming in from "Roommate Rent", and since this two bedroom condo at SoHo is slightly smaller than the one I rented, let's lower the "Roommate Rent" to $800/month.  I know what you're thinking '$800/month can't possibly change the outcome that much, can it?'  I'll let you be the judge.

Price.......................................................................................$437,900
5% Deposit...............................................................................$21,895  ($437,900 x 5%)
Monthly Rent..............................................................................$2,150
Initial Deposit..............................................................................$5,000
Remaining Balance of 5% Deposit.............................................$16,895  ($21,895 - $5,000)
         Total Rent Paid After 1 Year............................................$25,800  ($2,150 x 12)
         Credit Towards 5% Deposit.............................................$12,900  ($25,800/2)
         Total "Roommate Rent" After 1 Year..............................$9,600  ($800 x 12)
Remaining Balance of 5% Deposit Due After 1 Year..................-$5,605  ($16,895 - ($12,900+$9,600))

You read that correctly, between this new promotion and by adding a roommate into the mix, you won't have to pay the remaining balance out of your own pocket.  In fact, you will have a little over $5,000 extra that you can use to increase your deposit (if you're prudent with your money) or maybe take a very nice Caribbean vacation for 2 (if you're less prudent).  Plus, in a condominium building like SoHo Lisgar, you will experience other savings as well: no more monthly gym fee (SoHo Lisgar has a professional Dalton Brown gym, complete with all the exercising essentials - NOT your typical condo gym), cut down on your entertainment costs (host your own movie nights in the 24-seat private theatre) and trim back on your relaxation or spa budget (as part of the 7,000+ sq. ft. of hotel-inspired amenities, you will have access to the exterior lap pool, hot tub and indoor sauna).

For more details on this promotion or to learn more about the SoHo products, don't hesitate to send me an email.

Thanks for reading.

Taylor Bennett
Sales Representative - Bennett Property Shop Realty
www.BennettPros.com
Taylor@BennettPros.com
@OttawaTails

Condo Surplus in Ottawa? - Another Side of the Story (Part II)

If you read my most recent post (click here if you haven't) I have decided to take a page out of Ben Myers' of Fortress Real Developments playbook and started to dissect various news pieces that focus on the Ottawa real estate market.

In my last post I attempted to shine some light on the discrepancy in the number of condominiums listed for sale this year versus 2011 in a CBC Ottawa News article published last month - I invite you to read it here, if you haven't done so already.  Due to the apparent increased number of condominium listings, the author concludes that prices will be dropping.  In fact, according to the article, not only will prices be dropping but in some cases entire condominium projects are shutting down due to lack of sales.

In today's post I'm going to focus on some of the specific condominiums the CBC article used as examples to illustrate this supposed failing market.

The first example mentioned in the article is Ron Hu. Who is Ron Hu? - I have no idea.  All I know about him is that he purchased a condo "close to the By Ward Market" with his wife, who is a real estate agent, and they put $40,000 of renovations into the condo that they haven't been able to sell in 6 months.  At first glance this certainly sounds like quite the horror story - the couple have not only been unable to recover their $40,000 of renovation costs, but their also incurring more and more costs every month the property doesn't sell; definitely not the most pleasant situation to be in.  But there are a lot of details missing in this story:
Have either of them invested in real estate before?  This can make a huge difference.  Like trying anything new, if investing in real estate is foreign to you, you're more likely to make mistakes.  Being mentored or advised by an experienced or professional investor is something I recommend all novice investors should seek. Even if you're licensed to sell real estate, it doesn't mean you have the necessary knowledge to be a savvy investor, it only means you have easier access to such knowledge.
Have they ever renovated a property before?  As I mentioned above, if renovating is new territory for them, they're more apt to make an error.  And when you make a mistake renovating, it can usually end up being quite costly.  Again, this is an area where expert advise is priceless.
Where was the $40,000 of renovations spent?  Anyone who has ever renovated a property with the hopes of flipping it for a profit can tell you that spending money is the right or wrong places and make or break your real estate investment.  You need to know which areas to improve and which areas to leave as-is before taking on such a project.  You also don't want be guilty of superadequacy - also known as over-renovating; although some additions may look great, if the market place isn't demanding such a feature the cost may not be recoverable.
And where exactly is this condo located?  "Close to the By Ward Market" is quite ambiguous.  For those of you unfamiliar with Ottawa, the condo could very well be located in Vanier, Centretown, Ottawa U campus, Chinatown, Mechanicsville, Gatineau (the closest Quebec city to Ottawa), or a number of other neighbourhoods near the By Ward Market - some of these neighbourhoods are great and would yield a great return on your investment, while others are just starting their gentrification process and it'll take more time to turn out a profit.  As the old saying goes, the three most important factors about real estate investing are: location, location, location.

If the author of this news piece had chosen to use a subject that was a known or experienced real estate investor, this story would certainly have had much more impact.  But just as they hand-picked a random "investor" who didn't get the return he was looking for, I could easily find you a successful real estate investment story where, with the proper guidance and knowledge, they were able to get the results they wanted.

The author then moves on to some of the new condominium sites in Ottawa - The Bowery (being built by Richcraft Homes formerly known as The Edge.  It was recently re-branded and hosted a pre-launch last weekend - as of Nov. 14 over 15% of the project reserved), Claridge Icon (being sold by Claridge Homes at the corner of Carling Ave & Preston St. - as the CBC article states, they have only sold approximately 10% to date), and The Rhombus (a cancelled project that was to be built by Tega Homes and was recently sold to Quebec builder Brigil).  I will agree with the author - these are definitely signs that the condo market in Ottawa is changing.  Five years ago it would have been unheard of to see a new project cancelled or re-branded.  Back then, after a condominium project was released, the most change you would see were new floor plans or new specifications introduced - but even that was relatively rare.

Why are these projects re-branding, re-designing or closing up shop?  After 10 years of steady growth, are people in Ottawa suddenly rejecting condos?  Were they just a fad or a trend-du-jour?  Or is there something else contributing to the lack of sales?  One fairly important fact that the article failed to mention was that within 3 kilometers of all the aforementioned new condo sites, there are other condo sites that have sold very well and some have even already started and completed construction.

• A few blocks east of the Bowery, the Slater (being built by Quebec builder Broccolini Construction) has already reached its sales quota and construction will be starting later this year - this 22-storey condo has only been on the market for less than a year.  
• A short drive from where the Rhombus was planned, you will find the Eddy, a small 6-storey, 53-unit condominium by Windmill Developments located on Wellington Ave. in Hintonburg.  It has been slightly over a year since it was released and construction on the project has already reached the 3rd floor.
• One kilometer to the west of the Icon you will come across two new condo developments - Soho Champagne (by Mastercraft Starwood) and Hom (by Domicile).  Soho Champagne is a two-phase project comprising of 20 and 24 storey towers; they are pouring the concrete for the 5th floor for the Phase 1 this week.  Hom, a 12 storey condo, is already built and most residents have already moved in.

It's clear that people are still buying new home condos in the same areas where you find sites that have struggled with sales - so it's not the neighbourhoods or areas that the marketplace isn't responding to.  And after speaking to some of the sales staff and analysis old and new price lists from the Slater, the Eddy, Soho Champagne and Hom, they didn't have to dramatically reduce their prices to attract these buyers as the CBC article suggested.  In fact, in some cases, such as Hom and the Slater, they actually increased their prices substantially; upwards of $25,000 on some units - which adds support to the argument that it's not their prices that are the cause for the slowing sales.  In my opinion, buyers are seeking condos that suit their life style, and not the other way around.  And once they find some that do, they look for the best value - and value is weighed different by each buyer.

If you take a close look at some of the successfully-selling new condominium sites that I highlighted above, you'll notice that they have all been marketed, designed and created to appeal to a specific demographic.  With their competitive and affordable pricing combined with its downtown location, the Slater attracted a tonne of first-time buyers and young professionals.  The Eddy, being one of the smallest new condo buildings in the city and having LEED (Leadership in Energy and Environmental Design) certification, fit in very nicely to an already-environmentally conscious neighbourhood.  As Soho's past two projects, Soho Lisgar and Parkway, have proven, buyers looking for a little more pampering and hotel services have naturally gravitated towards the Soho hotel-inspired brand.  

Contrarily, the other condos whose sales have struggled were marketed to attract all potential condo buyers - investors, first-time buyers/young professionals and down-sizers - and by doing so they lost any type of unique identity making it problematic for would-be buyers to relate to the projects.  The Bowery/Edge seemed to realize this and on their second attempt of selling, looking at the success of their neighbour, their latest marketing campaign was aimed at a specific demographic - young professionals.  It's still a little too soon to analyze the results, but thus far the response has been positive.

If you are in the market for a condo, but haven't found something that has fit your needs, my advice to you is to be a patient and keep looking.  There is a multitude of options out there, and as more developers realize that the business model of "one condo fits all" is broken you'll see more unique projects offering different life-styles.  But if you're waiting on the side lines for the prices to drop significantly, I'm afraid you'll be waiting for some time, as a few builders have demonstrated already they're more willing to re-design, re-brand or close up drop before they heavily discount their prices.

Thanks for reading.

Taylor Bennett

Sales Representative - Bennett Property Shop Realty

www.BennettPros.com

Taylor@BennettPros.com

@OttawaTails

Condo Surplus in Ottawa? - Another Side of the Story

Inspired by the series of articles "The Other Side of the Story (I-IV)" written by Ben Myers of Fortress Real Developments I decided to take a similar look at a fairly recent and popular article written about the Ottawa condo market published on CBC News Ottawa.  The core message of this news piece was that the condo market in Ottawa is over saturated and therefore prices will drop, as will the rate of development.  And from a quick glance, that's what would appear is happening - but a little further analysis will reveal much more of the story.  In this weeks post, I'm going to analyze the CBC's articles opening statement "there are more condos up for sale in Ottawa than ever before - nearly 50 per-cent more than 2 years ago".

However, before I start, I think it's important that we define "condo" so we're all on the same page.  The term "condominium" is a type of ownership; it has nothing to do with the style of property.  Many people often think "high rise" when they hear the word "condo", but condos in Ottawa come in all shapes and sizes; high-rises, low-rises, townhouses, stacked townhouses, and even single family homes can be designated as a condo.

Now, let's get back to the CBC article.  It claims that the amount of condos for sale has doubled in over 2 years.  That sounds like an awfully staggering number; there must be cranes and construction sites everywhere in the National Capital Region, right? Well, actually, not really.  There are a few key contributors to this apparent rise of condos for sale.

Firstly, new home condos (that is condos that have yet to be built or are in the midst of construction) are being marketed differently than ever before.  When I first started working in this industry over 10 years ago, I would hardly ever see a real estate agent come by my new home office - this was mainly due to the very low (bordering on insulting) co-operating commission builders used to offer to outside real estate agents - back then it was common for developers to offer $500-$1,000 for a successful transaction, a far cry from the 2%, 3%, and even 4% co-operating commissions you see today.  Not only was a low commission offered, but often the commission wasn't paid until after final closing of the property, which in some cases could be well over a year.  Now, I'm not saying that real estate agents are only after money, but when your income is solely based on commissions, cash flow can be an issue.  And when you have to wait for over a year to get paid that can present some serious problems - especially if you have things like bills to pay and groceries to buy.  This pay structure was one of the main reasons there was a divide between the new home and the resale industries - it was almost as if they were two completely separate industries despite both falling under "real estate".  It wasn't until recently where that divide was narrowed, builders saw that resale agents were being alienated and changed not only the co-operating commission amount, but also the pay structure - it's now more common to see commission payments come in two parts; half is paid when the offer is firm, and the other half is paid when the property has been constructed and delivered to the purchaser.  This change not only brought more agents and their buyers to new home offices, but it also enticed more agents to help builders sell their product.  And what do real estate agents primarily use to advertise the properties they have for sale?  You guessed it, MLS.  A quick search on MLS (conducted the date this blog post was published - Nov. 1, 2013) showed that 162 of the 1,566 condominium properties on MLS have a "year built" date of 2014 or later - that means over 10% of the condominium market on MLS is a new home condo, a pretty substantial number considering there was only 1 new home condo listed in 2010.

The secondary reason for this increase in condos for sale are the number of "discount brokerages" that have popped up in recent years - personally, I define "discount brokerages" as brokerages who significantly reduce their commission or offer a small flat fee to home sellers for their listing "services".  I use the term "services" loosely since their types of brokerages don't offer much in the way of service - for their small fee or commission they will often post your property on MLS, provide you with a few "For Sale" and "Open House" signs and give you a few tips on how to sell your home.  You often get little to no guidance from an actual real estate agent and you're more or less left selling your property on your own.  With the increase in popularity of these services, and the low cost incurred, many home sellers have opted to list their property for sale "just to see how it goes".  This new option to list your home for sale has reduced the amount of obstacles that historically stood in the way of potential sellers and has increased the amount of properties for sale on the market.

So does this mean that there are no more condos (new home or resale) on the market today than there was last year?  Of course not, as Ottawa goes through its intensification of the downtown areas and our Baby Boomers age, you will see that number climb, but not quite at the rate the CBC article would have you believe.

Next week, in my continuation of my analysis, I'll dissect some of the examples of Ottawa's condo market mentioned in the CBC article.

Thanks for reading.

Taylor Bennett
Sales Representative - Bennett Property Shop Realty
www.BennettPros.com
Taylor@BennettPros.com
@OttawaTails

Pre-Construction Pricing Ending and a New Promotion at SoHo Champagne

If you haven't been by SoHo Champagne recently (a new condominium being built in Ottawa's Little Italy) you have missed a lot.  Construction started a few months ago and the building has just started to come out of the ground - at the time of writing this blog, the construction crew is on the 2nd floor.

Traditionally, at certain points in the construction phase, condominium developers increase their prices - and SoHo Champagne is no different.  But the great news is that you still have time to act on pre-construction prices, but only if you buy before December 1, 2013.  After that date prices will be going up by $10,000!  Now $10,000 may not seem like a big deal to some (especially when compared to the cost of real estate), but if spent wisely it can make a huge difference - it could provide your suite with hardwood floors throughout (typically new condominiums in Ottawa only offer hardwood or laminate flooring in the living areas, and carpet is normally provided in the bedrooms and dens), it could enable you to buy on a higher floor with a better view (which could ultimately increase your property value), or may even give you the opportunity to buy a larger condo or add some very unique customizations within your condo.

Now if a $10,000 incentive doesn't tickle your fancy, perhaps a brand new promotion will.  If you read one of my earlier posts or have been paying attention to the news, you won't be surprised to learn that interest rates are going up.  To counteract this inevitable increase, SoHo Champagne is offering to "Cut Your Interest Rate In Half" on selected suites for 2 years!  What does that mean? It mean that your monthly costs can be reduced by as much as $450 - if you're an investor, that increases your potential earnings, or could lower your rent making your property more attractive to tenants; if you're planning on residing in the condo, that's a saving of over $5000/year - I'm sure we would all like to have an extra $5,000 in our pockets.  Now, I know what you're thinking - "Only on 'Selected Suites'? That's just the builders way of getting rid of the junk no one wanted." but the 'Selected Suites' are those that are priced at or below $320,000 at SoHo Champagne.  I happen to have a price list for that site handy, this promotion would be valid on the following styles (they can be viewed here) - PS2B, PS2C, PS3, G, E & E1.  There are also a few different layouts whose priceshover around $320,000 - I'm sure with a little negotiating you could get the builder to make an exception or two.  Like all promotions, there are other conditions that apply, but certainly none that drastically alter the benefits - to learn what these conditions are, or to learn more about SoHo Champagne and other similar condo developments, feel free to contact me.


Thanks for reading.

Taylor Bennett
Sales Representative - Bennett Property Shop Realty
www.BennettPros.com
Taylor@BennettPros.com
@OttawaTails

Cita Condos - Coming Soon To Alta Vista

[Edit: Great article on Cita Condos in the Ottawa Sun from Thursday - check it out here. The sales office is now open as well (Monday-Thursday: 12-6, Saturday-Sunday: 12-5, Closed Friday and Statutory Holidays), stop in to learn about their opening promotions and view their great, full scale model suite]

Cita Condos, a new condominium development being built in Alta Vista (a neighbourhood found about 5-10 mins south of Ottawa University), is being released for sale in the very, very near future.  Now unlike some of the condo developments I have highlighted in previous blog posts, this development is a little different.  In terms of the actual structure and design, as you can tell from the photo of the scale model below, it's not all that different from many of its downtown or central counterparts.

But Cita Condos differs from its competition in two notable areas:
1) Its Location - As I mentioned above it will be built in Alta Vista - a very quiet, well-established area situated less than 5 km south of downtown Ottawa.  Within the neighbourhood you will find many single family homes, several schools (Public Elementary: Alta Vista, Arch Street, Featherston Drive, Hawthorne, Pleasant Park and Vincent Massey; Public Secondary: Canterbury High School, Ridgemont High School and Hillcrest High School; and Catholic: McMaaster, Ste-Genevieve, St. Patrick's Intermediate and St. Patrick's High School) and more than a fair share of city parks (Lynda Lane Park, Grasshopper Park, Billings Park and Orlando Park, to name but a few).  In and around the boundaries of Alta Vista you will find 3 major shopping areas: Billings Bridge Plaza (a shopping center to the South-West of Alta Vista), Elmvale Shopping Centre (located to the North-East of Alta Vista), and the newly established and ever-growing Ottawa Train Yards (slightly north beyond the borders of Alta Vista). With the numerous parks and mature trees, Alta Vista is a welcome change compared to where you normally find these types of condos.

2) The Interior Design - At the sales office (located at the corner of Playfair Dr. and Kilborn Ave.) they have built a gorgeous 2-bedroom model suite showcasing many of the standard interior specifications and also a few of the upgrades you can select to customize your condo.  When you first step foot inside the model you'll notice that it doesn't have the feel of a condo; it's much warmer due to the earthy-tones the designer chose instead of the dark-on-white contrast you find in most downtown condos.  The standard kitchens include quartz counter tops, a glass-tile back splash, beautiful cabinetry as well as 5 appliances (fridge, stove, dishwasher, microwave and hood fan).  As for the washrooms, without upgrading you will find porcelain ceramic tiles, quartz counter tops and your choice of a walk-in shower or tub.

So if you're tired of spending all the effort and time that's required to maintain a home - the yard work, the constant dusting and cleaning of rooms you may not even use anymore, costly repairs to the roof or windows, etc... - and have been considering the condo life-style but have found the downtown and central areas of Ottawa too noisy or crowded, then Alta Vista is the perfect fit for you.  With bachelor condos starting below the $200,000's, 1 bedrooms in the mid-$200,000's and 2 bedrooms in the low $400,000's, Cita Condos is a site you definitely want to have a look at.

For more info on taking part in Cita Condos VIP release (where special incentives and promotions are offered) or to see the floor plans and pricing, please feel free to contact me.

Thanks for reading.

Taylor Bennett
Sales Representative - Bennett Property Shop Realty
www.BennettPros.com
Taylor@BennettPros.com
@OttawaTails