Wednesday, November 18, 2015

Brand new duplexes















VERY RARE - brand new Ottawa duplex units being built near the airport.

Located just 1.6 km from the South Keys OTrain station, which in will connect with the new LRT and deliver your tenants to the Rideau Center in approximately 15 minutes.  

Tuesday, November 17, 2015

Mortgage rates increasing again ...

There have been quite a few increases in mortgage rates over the last month and they are set to rise again.  

With 5 year fixed rates as low as 2.49% this summer, we see some lenders now edging into the 2.84% range as per TD Canada Trust’s latest rate update, as an example.

For a 5 year variable, as low as 1.80% could be achieved this summer and now some lenders are offering a 2.40% as per Scotiabank’s latest rate update, as an example.  

With this, now is the time to buy!  A rate increase of just 0.2% on a 5 year term, $250,000 mortgage will mean an extra $2,258.52 in interest paid.  

Friday, November 13, 2015

Interesting graphic on size of Baby boomers


Court decision expands risks of disclosure with seller property information statement

The Ontario Superior Court has once again underscored how completing a seller property information statement (SPIS) can be a risky move for vendors.
When it comes to the purchase and sale of real estate the starting point for any analysis is “buyer beware”. For those looking to impress at cocktail parties, the specific expression is “caveat emptor, quit ignorare non debuit quod jus alienum emit,” which translates into “let the purchaser, who is not to be ignorant of the amount and nature of the interest, exercise proper caution.”
This general rule of buyer beware applies to defects that a purchaser could have discovered by means of a routine inspection (known as a “patent defect”) and also “latent defects” (those not discoverable by routine inspection, which are unknown to the vendor).
Notwithstanding the purchaser’s obligation to do their own due diligence, the rule of buyer beware goes out the window once the vendor has made a misrepresentation.
A SPIS is a standard form document that was drafted by the Ontario Real Estate Association. It will contain information relating to defects, renovations and other pertinent property information based on the seller’s knowledge and experience.
A vendor is not obligated to complete a SPIS and if the vendor elects to do so they open themselves up to significant legal risks.
The law in Ontario is that once a vendor completes a SPIS it creates the relationship necessary in law to hold a vendor legally responsible if the information contained in the SPIS is wrong or misleading. Although the buyer has a duty to investigate, the buyer is not required to challenge the honesty of the vendor and is entitled to rely on the representations made by the vendor as though they were true.

Saturday, November 7, 2015

WHY TEST FOR RADON?


This colorless, odorless radioactive gas is the second leading cause of lung cancer after smoking, putting your clients' health at risk.
Nearly 1 in 15 homes in the US and Canada has an elevated radon level.
Any home may have a radon problem - old, new, well-sealed and homes with or without basements.

Friday, November 6, 2015

CMHC Housing Outlook Notes

This week was the annual housing outlook conference put on by CMHC (Canada Mortgage and Housing Corporation).  It focuses on Ontario and Ottawa Real Estate.  

-          Starts remain low
-          Resale and renovation activity is higher
-          Renovations are driven by aging population and by landlords
-          Approx. 58,000 to 68,000 new homes in Ontario
-          Single family starts to drop
-          Construction levels are projected to be slightly higher than 2013 and 2014
-          Job market effects new homes more than resale
-          2016 resale for Ontario projected between 175,000 ad 220,000 units
-          Ottawa #3 in Ontario’s affordability index
-          Mortgage rates to increase by late 2016
-          Ontario economy should be back at full steam by mid 2017
-          Mortgage rates need to increase 10 to 12 months prior to economy rising, to avoid inflation
-          Ontario shall be #2 (behind BC) in job growth
-          US economy is increasing, good for Ontario, 75% of exports to USA
-          US dollar high means increased tourism
-          Ontario economy is being held back, as currently we are only providing 15% of US imports, traditionally this is 18% (high dollar likely cause)
-          Price growth across Ontario should reduce to 4 percent in 2016 and 2 percent in 2017
-          Some evidence of overvaluation in Ottawa Housing Market
-          Two fastest growing buyer groups in Ottawa
-          A - young boomers – 55 to 64 – 35% of buyer market
-          B – Echo – 24 to 35 – 25% of buyer market
-          Age group of 55 to 64 age group are adding a lot of jobs and are renovating for adult children and home offices
-          25 to 44 major renovations are basementapartments
-          Higher vacancy in older rental units – pre 1960s built have vacancy of over 3%; post 1960 built under 2%
-          86% of Ottawa rental stock was built pre 1979
-          TO implemented municipal land transfer tax in 2007, led to surge in sales
-          Majority of Ottawa immigrants are 25 to 44

Downside risks
-          Asian or Euro economies collapse
-          US growth in trade is hampered by Global competitions (US buys from China/Mexico not Canada)
-          Softening of market in GTA spills into other markets (Hamilton, Barrie, Oshawa)
-          Rising percentage of net worth in real estate (financial issues means having to sell at a fire sale)

Upside risks
-          US economy outperforms
-          Sluggish global growth keeps interest rates low

2006 to 2014
Highest value growth inside the greenbelt – over 90% which is 7.5% annually
Outside the greenbelt was approx. 35% (3.5% annually)
All real estate outperformed inflation
-          When the Fraser institute rating of a school increases by 10%, the value of homes in the district increase 5%

Total residential, non condo sales = 8,969
Single detached, 2 Storey = 5817 (64.9 percent)
Semi = 797
Town homes = 2,355

Single detached, 2 storey = 38% of sales
2 storey towns = 22% of sales
Bungalows = 17%

Four top sales areas for Ottawa homes – (57% of Ottawa’s sales)
West Orleans = 859
Kanata/Stittsville = 1481
Barrhaven = 1007
East Orleans = 1468
-          Over the last 9 years, townhouses are top growth housing style
-          Bungalows in suburbs out grew singles by approx. 10%
-          96% of available land in 2006 was in suburbs
-          97% of available land in 2015 was in suburbs
-          Available land in City decreasing by 2% annually

Prices relative to schools
-          Buyers pay more for homes further away from poor schools
-          Buyers pay more for homes in good school districts (regardless of distance from school)
-          Elementary schools show correlation to higher prices, no evidence of secondary schools
-          189 schools in Ottawa
-          56% of houses are sold in good school districts
-          Average Ottawa home is 600m from a school
-          Average Ottawa school is rated 6.5; Ontario average is 6.2
-          For every 10% increase in school rankings, house prices increase 5%
-          RISK for buyers, school districts can change, house could move from good to poor school district

Ottawa 2016 Outlook
-          Vacancy rates to go lower
-          Resale higher, due to increase single sales
-          Builder to creep higher due to town homes

Resale sales
2014 – 14,094
2015 – 14,700 (estimate)
2016 – 15,200 (projected)
2017 – 15,000 (projected – lower due to increasing mortgage rates)
                Singles – 57%
                Condos – 18%
                Town houses – 17%
                Semi-detached – 7%

-          Average resale single family home is $86,089 cheaper than new home
-          Ottawa is a balanced market
-          For every 2 houses listed, one sells
-          Home values are not increasing at historical rates due to low job income growth

Condos
-          Slight decline in condo prices since 2014 (0.8%), mostly due to condo town homes (declining since 2009)
-          8 months of condo supply, 5 months of freehold supply on market
-          Condos on the edge of a buyers market
-          3 years of condo price declines – 2%, 0% and 0.8%

Demographics
-          Population of approx. 1,000,000
-          2% growth annually
-          390,000 households in Ottawa
-          68% of people own/32% rent
-          700 households arrive annually from interprovincial migration
-          Public admin (government) down 10,000 jobs
-          Public admin is 20% of Ottawa’s jobs
-          Construction up 14,000 (due to LRT)
-          Service down 5,000 (includes IT jobs)
-          Service is 50% of Ottawa jobs
-          Employment is weak in Ottawa

-          Completed and unsold inventory – 549 condos and 180 rows
-          Average single home – 2,415 sqft; $208/sqft; mortgage $2,337
-          Average semi – 1983 sqft; $271/sqft; mortgage $2,496
-          Average town home – 1,812 sqft; $186/sqft; mortgage $1,568

Rental Trends
-          Vacancy rates will drop
-          Rental rates will increase
-          More purpose built rentals on market
Rental condos
-          2013 – 6,680 units
-          2014 – 7,100 units
-          2015 – 7,300 units
-          1,800 new immigrate households annually
-          Average 3.2 people per immigrant household
-          Average 2.2 for Canadians
-          70% of immigrants rent
-          54% of immigrant renters rent apartments
-          Average of 5,200 international students per year in Ottawa
-          900 temporary residents in Ottawa
Potential Negatives
-          Starts could scale back if unsold inventory increases
Potential Positives
-          Job growth and income increases and spur Ottawa housing activity 



Thursday, November 5, 2015

October Home Buyers weren't spooked by election results.

Members of the Ottawa Real Estate Board sold 1,161 residential properties in October through the Board's Multiple Listing Service® System, compared with 1,119 in October 2014, an increase of 4 per cent. The five-year average for October sales is 1100.

"Our October numbers show we outpaced last year and the five year average," says David Oikle, President of the Ottawa Real Estate Board. "Buyer activity was expected to taper off leading up to the Federal Election but it didn't seem to affect our overall performance by very much."

October's sales included 202 in the condominium property class, and 959 in the residential property class. Our year to date sales trend is also solid compared to last year with residential property class sales up almost 6% from 2014 and condominium property sales on par with last year.

"Ottawa's resale market continues to be a stable environment. Inventory has continued to decline since the busy spring market last May, bringing us back into balanced territory," says Oikle. "Cumulative days on market also came down slightly to 86 days from 93 days in September. In addition, the average sale price remains quite steady."

The average sale price of a residential-class property sold in October was $380,075 which is an increase of 2.8 per cent over October 2014. The average sale price for a condominium-class property in October has dropped by 13% from $290,739 to $251,177; however, the year to date average price of $258,995 is more in line with the current average. This in fact illustrates why the Board cautions that the average sale price information can be useful in establishing trends over time but should not be used as an indicator that specific properties have increased or decreased in value. The average sale price is calculated based on the total dollar volume of all properties sold.

"While the highest concentration of properties sold continues to be in the $300,000 to $400,000 price range, followed closely, again, by the $200,000 to $300,000 range, there were also a good number of sales in the $500,000 to $750,000 price range in October." says Oikle. "In addition to residential and condominium sales, OREB members assisted clients with renting 223 properties in October, and over 2500 since the beginning of the year."