Despite the residential market dominating the Ottawa real estate market in the first half of 2018, the condo market in June outgrew the residential market in terms of home sales and buyer demand. There were important factors that contributed to the significant growth of the condo market:

Record Number of Units Sold

• The condo market sold 455 condo units compared to 408 units sold in June 2017, an 11.5 per cent increase.

• The majority of the sales occurred in the $200,000 and $275,000 and $300,000 and $350,000 price range, accounting for 49.7 per cent of the condo market. 

• The most sold units were: 
  • two-storey homes - average price - $235,791 (previously $236,581 in June 2017)
  • three-storey homes - average price - $277,325 (previously $279,683 in June 2017)
  • one-level homes - average price - $307,556 (previously $301,796 in June 2017)

• Most of the condos bought were in:
  • Central Ottawa - average price - $334,183 (previously $340,158 in June 2017)
  • Kanata/Nepean - average price - $223,412 (previously $220,473 in June 2017)

Buyer Demand For Condos

• According to the Ottawa Real Estate Board, buyers preferred to purchase condos due to the lack of inventory, particularly
  in the single-family resale home market. For example, in the first half of 2018, there has been a 37 per cent decrease in the number of single-family homes sold at the $250,000 and $275,000 price range, and a 41 per cent decrease for the $275,000 and $300,000 price range. In comparison, there has been an increase in condo sales of 49 per cent and 22 per cent respectively for those same price ranges. This trend has demonstrated that buyers also bought condos for their affordability, especially for first-time homebuyers who value the importance of home ownership, instead of paying higher rental apartment costs.  

• The increase in construction costs, especially, for example, in concrete, increasing development fees, and the lower supply skilled
  tradespeople have contributed to expensive purchase prices of newly-built residential homes, which new buyers are unable to afford.  
  
  

 Lower Residential Home Sales

• The residential market experienced a decrease in its home sales with 1,615 residential homes sold in June compared to 1,755 homes sold in June 2017, an 8 per cent decrease.

• The majority of the residential home sales were in the $300,000 and $450,000 price range, accounting for 46.5 per cent of the residential market, and $500,000 and $750,000, which accounted for 19 per cent of residential home sales.

• Buyers bought mostly:
  • Two-storey single-family homes - average price - $475,999 (previously $458,066 in June 2017)
  • Bungalows - average price - $403,772 (previously $391,604 in June 2017)

• Most of the homes bought were in:
  • Casselman/Hawkesbury/Rockland - average price - $292,790 (previously $294,633 in June 2017)
  • Kanata/Nepean - average price - $463,450 (previously $423,307 in June 2017)
  • Central Ottawa - average price - $587,040 (previously $572,100 in June 2017)
  • Orleans - average price - $437,344 (previously $401,527 in June 2017)

Increased Property Values For Single-Family Homes Throughout Ottawa 

• There has been a significant change in the trend of price increases of single-family homes in the city. West-end Ottawa, which became the dominant district for the first six months of 2018 where homeowners received significant financial gains in increased property values of their homes, lost its top position in June. Now, single-family homeowners living in the eastern, northern, central and southern districts of the city have also received significant price increases on their homes over a one-year period (from June 2017 to June 2018). The top neighbourhoods were:

1. Manotick/Kars/Rideau Township - 11.8 per cent (average price: $552,900)
2. Kanata - 11.7 per cent (average price: $442,900)
3. Barrhaven - 11.5 per cent (average price: $396,100)
4. Hintonburg/West Centretown - 11.2 per cent (average price: $537,200)
5. Belair Park/Copeland Park - 10.5 per cent (average price: $464,500)
6. Blossom Park/Airport - 10.2 per cent (average price: $452,200)
7. Vanier - 9.9 per cent (average price: $359,900)
8. Manor Park/Cardinal Glen - 9.9 per cent (average price: $610,100)
9. Elmvale Acres - 9.9 per cent (average price: $417,000)
10. Parkway Park/Queensway - 9.9 per cent (average price: $431,500)
11. Cyrville/Carson Grove/Pineview - 9.9 per cent (average price: $425,600)
12. Stittsville/Munster/Richmond - 9.9 per cent (average price: $480,500)
13. Overbrook/Castleheights - 9.9 per cent (average price: $423,600)

Tip: 

Do you know that you can become your own bank? Yes, you can. If you have a Registered Retirement Savings Plan (RRSP), a Tax-Free Savings Account (TFSA), a Home Equity Line of Credit (HELOC), stock market investments and/or cash savings, you have an advantage that most people do not know and use to become financially independent and successful. You can use any of these financial assets to invest in real estate without owning and managing an investment property. For example, you can lend your RRSPs, TFSAs, HELOCs and personal savings to a trusted friend who will use your money to purchase an investment property that they manage on their own without you doing the work, such as dealing with difficult tenants, plumbing issues etc. In return, the money you lend to your trusted friend is secured against the title of the investment property and, at the same time, you earn a significant return on your money from the interest you charged your friend for using your money as a real estate investment. This no-hassle investing strategy is popular among individuals and families who are looking to generate extra income and build wealth without investing in the stock market or are building on their financial portfolio that is in the stock market. Here is an example.

Let's say that you have $100,000 in a TFSA account you would like to invest outside of the stock market. A trusted friend, who has a successful track record in making money in real estate investing, comes to you looking for a money partner to invest in a profitable real estate investment property he or she found in the market. Given your interest in investing your $100,000, you offer a deal to your friend where you would lend him or her $100,000 to purchase a real estate investment property on the condition that he or she will pay you back the $100,000 plus 12% interest within one year. You and your friend agree to the terms and conditions of the deal.  Your friend purchases the investment property using your $100,000 as the downpayment, which is secured against the property that legally protects your $100,000 investment. After the one-year ends, as agreed in the deal, you receive a cheque from your friend that pays you back your original $100,000 plus $12,000 in interest, which comes to the total of $112,000 (100000(1 + (0.12 × 1)). Therefore, you earned $12,000 in additional income in one year without doing any work! In this situation, the money worked for you and not against you.  

The benefits of this strategy are that:

• your $100,000 investment is legally secured against the property to protect you financially;
• your rate of return on your investment will be guaranteed as you expected (compared to an investment in the stock market where the rate of return constantly changes where you may not earn the rate of return you expect to receive)' and,
• you, not your friend, are in control of your investment in terms of the way it should be managed that meets your needs and expectations.  

Does this sound like a good idea that can help you? If so, I am here to help and support. 

I welcome your comments and questions.