Ottawa's hot housing market becoming unaffordable for some
OTTAWA -- There has never been a more intense housing market in Ottawa than there is today.
Prices are through the roof; which is great for sellers, but buying a house in today’s market might not be as simple as you think.
Tanya Trevors and Chris Armstrong were lucky enough to purchase their dream home just before COVID-19 hit the capital last year, but that doesn’t mean it was any easier.
"Couple hundred thousand dollars I would say, more than our budget," says Armstrong.
Trevors adds, "Yah, we did get into a bidding war. There was one other person bidding on the house. So we did end up overpaying for the house.”
The market was just starting to heat up to what we see today. They avoided the spike, but still spent about $50,000 over asking.
“We were looking for almost a year," says Trevors. “And we’re really happy with what we got. So my advice would be to be patient.”
Dominique Milne of Engel & Volkers is a real estate broker in Ottawa. She says low interest rates, combined with the government and high tech sectors in the capital, have created a perfect storm for sky high prices in Ottawa.
"We have record low interest rates, which are certainly funnelling some fire," says Milne. “It’s a fantastic time to sell. Everything is selling. We’re down to 16 days on market for February. We haven’t seen that ever. But for buyers, it is hard. The competition is fierce. You have to have your ducks in a row. Conditions? Forget it."
Andrea and Scott Martin have put down nine offers on nine houses, each time being outbid by other buyers.
"We’ve been looking for almost two years," says Andrea. "We’ve gone up to almost $170,000 over and still not gotten the house."
Over the course of two years, prices have risen so high, the Martins say it's near impossible to get what they were originally hoping for.
"When we started looking for houses, we were looking in a range of around $400,000, and they were nice properties," says Scott. "And now when we look at anything of the same quality, it's almost double the price."
They say they are quickly running out of hope, and options.
"Eventually we’ll be priced out of the market if the prices keep going up the way they are," says Andrea.
The pandemic has had a lot to do with people’s lifestyle change and working from home, causing a supply and demand issue. It’s changing the way people work, and what most families need during these times.
"Suddenly you have two people working at home. Two kids at home on and off. And we’ve gone from needed three bedrooms to needing five bedrooms and an extra space for people to separate from themselves," says real estate broker Daria Kark of Engel & Volkers.
Kark adds a lot of homebuyers are being squeezed out of the market by investors.
"Current rates of two per cent or so for a five-year fixed mortgage, you know, you can't make that much on a regular investment. So people are just investing in their mortgages. They’re investing in their real estate."
But as frustrating as it is to be a home buyer today, the Martins have not lost all hope just yet.
“We’re offering on another house tomorrow,” says Scott. "Offering over asking, no conditions. Same as every house we’ve bid on. We’ve never had a condition and it never seems to matter. So we don’t get our hopes up anymore, but we keep trying."
The Ottawa Real Estate Board reported record sales in February.
A total of 1,390 residential properties were sold in Ottawa last month, up from 1,134 in February 2020. The average sale price for a residential-class property was $717,914, an increase of 27 per cent from a year ago. Condominiums sold for an average of $407,671, an increase of 17 per cent from February 2020.
The sales volume for residential properties and condos in Ottawa was $885,592,105 in February, 54 per cent higher than the same month last year.
Sunday night update: Andrea and Scott Martin got confirmation that they did in fact get the house. It was their ninth offer and they paid $80,000 over asking.
“Even though it cost us more than we had originally hoped, we are over joyed to finally have found our dream home,” they said.
Added Andrea: “Living in an apartment during COVID had been tough, so we are excited to finally have space to live.”