By Maureen McEwan
Typically, spring is prime house hunting season in Ottawa — as the weather warms up, so does the local market.
The COVID-19 pandemic has disrupted that timeline for buyers, sellers and real estate professionals alike.
The Canadian economy is shifting daily, but when the pandemic subsides, the housing market will be there. So here is some advice for would-be buyers who are at home, contemplating their first big step.
Where to start?
When you begin the search for your new home, the process can be daunting. Buyers often sift through listing after listing, day after day, before seeking any professional guidance.
It is easy to get overwhelmed and lose sight of things, but what must be sorted first is the money, said Deborah Burgoyne, president of the Ottawa Real Estate Board (OREB).
Securing mortgage pre-approvals and overall financial health should be the top priority for serious prospective buyers. Deborah said the discussion with the bank about interest rates needs to be done with “eyes open.”
“Don’t be naive — get as much information as possible,” she said. “You need to speak with a mortgage broker and get something in writing from them.”
There’s also taxes, legal fees, inspection fees, moving and set up costs to consider. If you are looking to buy a condominium, monthly fees and special assessments should be reviewed.
But if you’ve got the budget, Deborah said buying is the prudent choice.
“I think, if you want to get in, bite the bullet now when you can get in on a low-interest rate,” she said. “But also, our prices always increase.”
“We’re [Ottawa] always a healthy incline. It’s been a little crazy, like I said, the last two or three years, but you need to get into it,” she added. “Unless you were to save more money for a down payment over time, but then the prices keep marching on.”
Three years ago, Deborah remembers watching the spring market heat up firsthand. She can be that specific because she was a home buyer in March 2017 — she experienced the demand on personal and professional fronts.
“And lo and behold, here we are just over three years ago and it hasn’t stopped,” she said.
The OREB reported an increase in sale prices across both residential and condominium properties in a recent press release (March 4). In February, the average sale price for a condominium-class property was $349,813 (an increase of 21.3 per cent from February 2019). The average sale price for a residential-class property was $563,694 (up 21.1 per cent from this time last year).
For a Canadian city, Ottawa has strong appeal. It is more affordable than other major centres and it serves as a steady employment hub.
“The term I’ve heard in the last couple months is ‘employment migration,’ Deborah said. “We’re hiring in the government sector, high tech and [the] RCMP and military are always relocating to Ottawa.”
“We’ve got an educated workforce, good employment and it’s a good place to raise a family,” she added.
Beyond that, she said the city is relatively safe and there is a lot of green space surrounding the core.
Where are first time buyers looking?
While the suburbs will always be alluring, Deborah said that buyers are being drawn to areas closer to the city, like Westboro, Wellington Village, Hintonburg, Ottawa South and the Glebe.
These areas are more expensive, with buyers having less square footage, but they appreciate the benefits of downtown life and different amenities like local shops and good schools.
“They like those areas,” Deborah said. “They like the walkability areas, even people starting to have families. They don’t seem to mind being in the busy hub.”
Who is buying right now?
Current buyers are often identified as Millennials and Generation Z kids. Deborah said many of them were living at home, or attending school, so they waited until they could afford the purchase in their late 20s and 30s.
With older generations, downsizing is the name of the game. They are moving into luxury condos in the city and new rentals. Deborah said approximately half of senior buyers are going into rentals.
What advice would you give to first time buyers?
The first piece of advice Deborah offered was on appearances. The inside of a condo or house can be altered in many ways. Buyers should be focused on the space and community around it — noise, neighbours, proximity to traffic, etc.
“I remind people, when they are out there looking, to not get caught up in the shiny stuff.”
“You’re living in this house or condo unit, on this street, in this community,” she added. “So think about what that’s going to look and feel like in three months, six months.”
Her second piece of advice was on the future.
“Don’t buy something too small that you can’t grow into,” Deborah said.
It is important to have “elbow room” in case your situation changes, like if you have a partner or family down the road.
She also advised that first-time buyers enlist help and have a team they trust — with a realtor, mortgage broker and/or other professionals.
“There’s a lot of things to learn and if you’ve been at it a long time, you’re quicker to pick things up and articulate them for people and pull stuff out of your buyer too, right?”
“You can remind them of the things that were important to them,” she said. “It’s like peeling back an onion really, the relationship.”
Finally, Deborah recommended that buyers consult with their family.
“Listen to your parents! They’ve been on this planet for decades, hopefully they’ve owned a few homes, learned a few things,” she said, laughing. “And they are a great resource as well.”
This interview was conducted in March ahead of some of the impacts of the pandemic and consequent political decisions. As noted, the economic climate is constantly-evolving with COVID-19.
For up-to-date information on the industry and market, visit the Ottawa Real Estate Board (OREB) at oreb.ca, the Ontario Real Estate Association (OREA) at orea.com or the Canadian Real Estate Association (CREA) at crea.ca. For first-time buyers, those associations have a myriad of resources available to the public.
This story appeared in the Spring 2020 edition of Homes & Condos.