'It's mind-blowing!' $100,000 increase in new home value surprises Ottawa homeowners
OTTAWA -- Brittany Cassidy and Peter Trevisan became first-time home buyers at the end of August, buying a new construction home just outside of Stittsville.
At the time, base prices for the couple’s new home in Bridlewood Trails were $537,000. Seven months later, the same model is selling for $691,000.
"It’s pretty crazy, obviously it makes us feel like we made the right decision and that timing was everything," Cassidy said.
The increase is substantial. The pair haven’t even moved into their new home, but already they’ve made roughly $100,000 in equity.
"Its mind blowing, it’s leaving us with a lot of opportunities that are pretty exciting in front of us, to hopefully be able to use that equity for more; whether it’s property or investments in the future," Trevisan said.
The situation isn’t unique to Bridlewood Trails.
In nearby Edenwylde, the Tamarack Homes Cambridge model was selling for $474,000 last fall. Now it’s being listed over $700,000.
"It is very surprising; but at the same time, this has been happening for quite some time in Ottawa," real estate broker Paul Czan said.
Czan specializes in pre-construction homes. He says the rise in prices is linked to the increase across Ottawa’s real estate market.
"The trends really do follow each other, and residential developers really do adjust their prices on a week by week basis, based on what’s happening in the market," he said.
Czan says developers will continue to increase prices until they have difficulty selling the homes. He added construction prices are also driving the increase.
"The cost of lumber in 2020 went up by 78 per cent and Ottawa’s residential real estate construction costs went up by the highest factor in all of Canada by a total of 5.8 per cent," he noted.
For first time home buyers, those costs can be prohibitive.
"If this were the same situation back in August, we would be having a much different conversation and it would have definitely affected our budget so we probably would have had to consider other options," Cassidy said.
Real estate agent Steve Peippo says he’s sold new construction houses across the city that have seen similar increases in price over the past year. He says the rapid increase is cause for some concern.
"With the affordability factor and Ottawa being such a government city, when you start looking at what a household income can be pre-approved for, I think it’s going to have a slowdown based on affordability," he said.
Peippo said he doesn’t expect the prices to rise at this rate consistently, instead he says it’s about finding their new plateau in this market.
"We’re not going to see those numbers jump 20-30 per cent year over year values. It can’t keep it up, I don’t think," he added.
Trevisan and Cassidy say they’re just happy they bought when they did.
"I think being able to use the equity that’s grown in our property already...it really means that we’re going to be able to grow our real estate portfolio way faster than we ever thought we were going to," Trevisan said.