4 Reasons Why It’s a Good Time to Buy Your First Ottawa Home……
I have found that while many of my prospective buyers who are keen to buy their first home or condo. (or those wishing to get into the market for investment purposes) they are having second thoughts as they’re a little nervous about what they’ve heard “about how fast and competitive the Real Estate market is in Ottawa this year.”
Some clients are concerned they will be competing with many other buyers and end up having to offer substantially more than the asking price on a property they like.
But as I explain to these clients, this is actually a very good time to buy in Ottawa, for many reasons. And putting off your first home purchase means you can lose the many benefits of getting into the Ottawa market, while property prices continue to rise.
Here are just a few reasons to consider buying now, rather than putting off that purchase:
The Market is Not as Fast as You’ve Heard:
It’s true that the number of properties for sale in our city has been lower than usual for several months, as the Ottawa Real Estate Board has reported in its monthly reports on sales in our area.
This has meant that some sellers in the hottest neighbourhoods of our city have been seeing multiple offers and quick sales.
But keep in mind that in its report on Ottawa’s June resale market, the Real Estate Board said only 39 per cent of all the properties sold in June sold for above the asking price. As Board President Dwight Delahunt said, “the vast majority of properties are still being sold at or below the listed price.”
So, the number of properties selling for above the asking price are the minority. As a Realtor who has helped hundreds of clients buy their first properties, I know this city well and can help you find properties in many areas that are less likely to be the subject of bidding wars.
Average Ottawa Prices Remain Amazingly Affordable:
Keep in mind that Ottawa continues to be one of the most affordable large cities in Canada, with prices in our market that buyers in Vancouver and Toronto could only dream of.
If you’re looking for a condo unit: In June of this year, the Ottawa Real Estate Board reported the average selling price of a condominium-class property was just $308,482. In Toronto, many one-bedroom condo units sell for more than twice that price.
Of the condo units sold in Ottawa in June, 55% were priced between $225,000 and $349,999. That makes a condo a particularly affordable option for young buyers looking to enter the market and start enjoying the benefits of real estate appreciation.
If you’re looking for a House: The average sale price of residential-class property in our region in June was $500,716. Of the homes sold in June in Ottawa, 43% were priced between $350,000 and $499,999. In Toronto, you’d be very lucky to find a modest condo unit in that price range.
Spending on a Mortgage is a Better Investment than Spending on Rent:
If you’re currently renting in Ottawa and thinking you will put off buying for another year or two, add up how much you will spend on rent in a year. After one year and thousands of dollars of payments, the only person who benefits is the landlord.
When you buy, the sooner you enter the market, the sooner you are contributing to your own financial security and the growth of your investment.
Consider some of the increases we’ve seen in the Ottawa area. In June, the average condo sale price in our city was up 6. 2% over what the average price was in June of 2018.
The average sale price of a residential-class property in June was up 11.4% over what it was a year ago.
So those who purchased a year ago have already seen returns on their investment, while those who continued to rent have missed out on that benefit.
The longer-term numbers are impressive. And those who bought several years ago have seen their investments rise.
“In the past decade, we’ve seen an approximate 52% increase in average prices for residential properties and 34% for condos, an excellent return on investment for homeowners,” Dwight Delahunt, President of the Ottawa Real Estate Board, said last month, when the Board released June sales figures for our region.
Interest Rates are Low:
As of this writing, interest rates in Canada have reached their lowest levels in a couple of years. As the mortgage rate comparison site ratehub.ca points out, rates on a five-year fixed-rate mortgage have dropped to their lowest level since September of 2017, with lenders offering five-year fixed-rate mortgages as low as 2.49%. This is good news if you’re wanting to buy soon and you arrange a pre-approved mortgage at a good rate. As rate hub reminds buyers, once you are approved for a mortgage, you can hold a rate for up to 120 days as you search for that ideal new home.
The low rates are also good news if your mortgage is coming up for renewal and you want to shop around for the best possible rate.
I can understand why some buyers, especially first-time buyers, get a little nervous about making the first step, entering the market and putting in an offer. For most people, buying a home is the biggest purchase they will make in their lives.
But as I’ve told many clients, when you stop renting and invest in real estate, you are paying down your mortgage and your initial investment can grow significantly, and generally at a greater rate than other investments do.
If you’re considering buying or selling property in the Ottawa area, I’d love to chat with you about the current market and the expertise I offer. I have been helping clients buy and sell properties in our city for more than 30 years.