Condo vs. House: Which is the Better Investment in the Ottawa Real Estate Market?

Investing in real estate is a significant financial decision that requires careful consideration and analysis. In the Ottawa real estate market, prospective buyers often face a crucial dilemma: Should they invest in a condo or a house? Both options have their own advantages and disadvantages, and the choice ultimately depends on individual preferences and investment goals. In this blog post, we will explore the key factors to consider when deciding between a condo and a house as an investment in the Ottawa real estate market.

Affordability and Upfront Costs

One of the primary considerations when investing in real estate is affordability. Condos are generally more affordable than houses in Ottawa, making them an attractive option for first-time buyers and those with limited budgets. Condos often come with a lower upfront cost, requiring a smaller down payment and offering more manageable mortgage payments. On the other hand, houses tend to have higher price tags and may require a more substantial initial investment.

Maintenance and Lifestyle

Another factor to consider is maintenance and lifestyle preferences. Condos typically offer a low-maintenance lifestyle as the responsibility for exterior maintenance, repairs, and landscaping rests with the condominium corporation. This can be a significant advantage for busy professionals or those who prefer to spend their time on other pursuits. Houses, on the other hand, offer greater control and privacy but also come with additional maintenance and upkeep responsibilities. Homeowners are responsible for the maintenance of the property, including repairs, landscaping, and other ongoing costs. With greater responsibility in owning a home also comes greater freedom, larger property, and typically more storage space among other things. Depending on the lifestyle your tenants intend to live, the size of your family, and your day-to-day needs, either may be a better option for you. Homeowners may spend more time at home and like to entertain, while condo owners may be away from home more often and want fewer responsibilities.

Location and Amenities

Location plays a crucial role in real estate investment. Condos are often located in urban centers and offer proximity to amenities such as shops, restaurants, and public transportation. They are especially attractive to young professionals or those looking for a vibrant city lifestyle. Houses, on the other hand, are more commonly found in suburban areas, offering more space, larger yards, and a quieter atmosphere. Families or individuals seeking a more peaceful environment may find houses more appealing.

Rental Potential and Cash Flow

Investors often consider the potential rental income and cash flow when deciding between a condo and a house. Condos in Ottawa tend to have a higher rental demand, especially in downtown areas and near universities, making them a popular choice for investors looking for steady rental income. Additionally, condos often have lower maintenance costs, allowing for a higher return on investment. Houses, on the other hand, may attract long-term tenants, such as families, who are looking for a spacious living environment. Renting out a house may provide a higher rental yield but may also require more ongoing maintenance and management.

Market Trends and Appreciation Potential

Examining market trends and appreciation potential is crucial for long-term real estate investments. In recent years, the Ottawa real estate market has witnessed steady growth and appreciation in both condos and houses. However, houses tend to have a higher appreciation rate compared to condos over time. Houses offer the potential for land value appreciation, especially in desirable neighbourhoods. Condos, on the other hand, may have more stable and predictable price growth, with less emphasis on land value.

When considering whether to invest in a condo or a house in the Ottawa real estate market, it's essential to weigh factors such as affordability, maintenance, location, rental potential, and market trends. Condos offer a more affordable entry point, low-maintenance lifestyle, and urban convenience, making them ideal for first-time buyers or investors seeking consistent rental income. Houses provide greater control, privacy, and potential for land appreciation, attracting families and those seeking a suburban lifestyle. Ultimately, the choice between a condo and a house depends on personal preferences, investment goals, and long-term financial planning. Consulting with a real estate professional can provide valuable insights and guidance tailored to your specific needs.

The Residences: Image Courtesy of Capital Condos

Pros of Purchasing an Assignment Sale

What is an Assignment Sale?

An assignment involves the transfer of the original Agreement of Purchase and Sale (APS) from the original purchaser (the Assignor) to a new purchaser (the Assignee). Instead of buying or selling the physical condo itself, the parties are trading their respective interests in the agreement. The Assignee, the new buyer, acquires the rights and obligations of the Assignor, the original buyer. Assignments are often referred to as selling the "paper" or the deal. While assignments can occur in any transaction, they are particularly common in real estate, especially for land assembly projects (where multiple lots are purchased to create a larger property, such as for a condo development) or for pre-construction condominiums. However, in Ottawa, it is uncommon for people to sell assignments for residential freehold properties (houses) due to the relatively short construction period of only six months.

What are the pros of purchasing one?

1. Access to Desirable Properties: Often, pre-construction projects in prime locations sell out quickly, leaving many potential buyers disappointed. However, by purchasing through an assignment sale, you can gain access to these coveted units that may otherwise be unavailable on the open market.

2. Potential for Profit: As Ottawa's real estate market continues to appreciate, purchasing a property during the pre-construction phase allows you to benefit from rising property values. By the time the project is completed, the market value of the condo may have increased, enabling you to sell the assignment at a higher price and realize a profit without ever owning the property.

3. Flexibility and Lower Costs: When you purchase a pre-construction condo through an assignment, you are essentially buying the rights to the property and the original purchase agreement. This means you can avoid some of the costs associated with traditional real estate transactions. Additionally, you may have the option to customize the unit during the construction phase, adding personal touches to suit your preferences, typically within the last year of the construction.

4. Mitigated Risks: Purchasing a pre-construction condo from an assignment sale in Ottawa can help mitigate certain risks associated with buying directly from a developer. For instance, you can assess the progress of construction before committing to the purchase, reducing the uncertainty of investing in a property that is yet to be built. Moreover, the assignment process allows you to inherit any warranties or guarantees offered by the developer, providing an added layer of assurance.

5. Time Advantage: By purchasing a pre-construction condo through an assignment sale, you can save time compared to buying directly from the developer. Typically, developers have extended construction timelines, and the process can involve delays. However, by acquiring an assignment, you can skip the waiting period and enjoy a more immediate possession of the property once the deal is closed.

To summarize, some of the best parts about assignment sales for buyers include:

• Owning a brand new unit without having to wait years for it to be built

• Less competition from other buyers as assignment sales are typically marketed significantly less (and are a more complex transaction, meaning a smaller buyer pool)

• Less likely to enter a multiple-offer scenario for the same reason

• Don’t have to worry about significant delays or project cancellations like you have when the project is just beginning

Investing in a pre-construction condo through an assignment sale in Ottawa can be an excellent opportunity for buyers looking to secure desirable properties, capitalize on potential profits, and enjoy greater flexibility in their real estate transactions. While it's important to conduct thorough due diligence and seek legal advice, the advantages of buying from an assignment sale, including access to sought-after properties, profit potential, lower costs, mitigated risks, and time advantages, make it a compelling option for astute buyers in Ottawa's thriving real estate market.

The Residences: Image Courtesy of Capital Condos

Exploring Ottawa's Luxury Condo Market: Top Developments and Amenities

Ottawa's luxury condo market is thriving, offering discerning buyers a wide range of upscale properties with exceptional amenities and breathtaking views. If you're in search of opulent living spaces and luxurious lifestyles, this comprehensive guide will introduce you to some of the top luxury condo developments in Ottawa. From stylish penthouses to exclusive waterfront residences, let's dive into the specific details and explore the best that Ottawa's luxury condo market has to offer.

The Residences: Image Courtesy of Capital Condos

The Residences at Island Park Drive

Located in the heart of Westboro, The Residences at Island Park Drive will offer unparalleled luxury living. This prestigious development features spacious units with high-end finishes and panoramic views of the Ottawa River. Residents can enjoy access to a private fitness center, rooftop terrace, and concierge services. The building's prime location provides easy access to trendy boutiques, gourmet restaurants, and scenic walking paths along the river.

The Rideau

Situated in the vibrant neighbourhood of Lowertown, The Rideau is a landmark luxury condo development offering an exceptional living experience. With its iconic architecture and world-class amenities, this upscale residence features elegantly designed units with floor-to-ceiling windows, gourmet kitchens, and lavish bathrooms. Residents can indulge in a range of amenities, including a state-of-the-art fitness center, spa, indoor pool, and private theatre room. The Rideau's central location provides convenient access to the ByWard Market, cultural attractions, and the picturesque Rideau Canal.

The Slater

The Slater

Nestled in the heart of downtown Ottawa, The Slater is a premier luxury condo development renowned for its contemporary design and exquisite finishes. The building's sleek glass exterior is a striking addition to Ottawa's skyline. The spacious units boast open-concept layouts, high-end appliances, and private balconies offering stunning views of the city. The Slater offers residents exclusive access to a rooftop terrace, fitness center, and a stylish lobby with concierge services. With its prime location, residents can enjoy the vibrant downtown lifestyle, with top-notch dining, entertainment, and shopping just steps away.

Lofts at Tribeca

Located in the desirable neighbourhood of Centretown, The Yard and Lofts at Tribeca offer luxurious urban living with a modern twist. The development features a mix of loft-style units and spacious condos, combining contemporary design with industrial-inspired elements. Residents can enjoy high ceilings, exposed ductwork, and stylish finishes. The amenities include a fully equipped fitness center, a party room, and an outdoor terrace with BBQ facilities. The Yard and Lofts at Tribeca are ideally situated near Bank Street, known for its trendy restaurants, vibrant nightlife, and boutique shops.

The Metropole

Situated in the heart of Sandy Hill, The Metropole is an exclusive luxury condo building known for its elegant design and sophisticated living spaces. The spacious units feature high ceilings, oversized windows, and top-of-the-line finishes. Residents can take advantage of amenities such as a fitness center, sauna, and a landscaped rooftop terrace with panoramic views of the city. The Metropole's prime location offers easy access to the University of Ottawa, Rideau Centre, and the scenic pathways along the Rideau River.

Cathedral Hill

Cathedral Hill is a prestigious luxury condo development situated in the charming neighbourhood of Golden Triangle. Known for its iconic architecture and sophisticated design, Cathedral Hill offers a collection of spacious and thoughtfully designed units. Residents can enjoy amenities such as a fitness center, a rooftop terrace, and a lounge area with a fireplace. The building's prime location provides easy access to the National Arts Centre, Parliament Hill, and the vibrant Elgin Street, renowned for its bustling entertainment and dining scene.

The Bowery

The Bowery

The Bowery is a sleek and modern luxury condo development nestled in the heart of Centretown. With its striking architectural design and upscale amenities, The Bowery offers residents a sophisticated living experience. The units feature contemporary interiors, high-end appliances, and spacious balconies. Residents can enjoy amenities such as a fitness center, a rooftop terrace with BBQ facilities, and a stylish lobby with concierge services. The Bowery's central location provides easy access to Parliament Hill, the Rideau Canal, and the trendy shops and restaurants along Bank Street.

The Eddy

Situated in the vibrant neighbourhood of Hintonburg, The Eddy is a unique luxury condo development that embraces sustainable design and modern aesthetics. The building offers environmentally conscious features such as geothermal heating and cooling systems and a green roof. The units showcase contemporary finishes, open-concept layouts, and large windows to maximize natural light. Residents can take advantage of amenities such as a fitness center, rooftop terrace, and bike storage. The Eddy's location offers easy access to Wellington Street's hip boutiques, art galleries, and the popular Parkdale Market.

Ottawa's luxury condo market is brimming with exceptional developments, each offering its own distinct style, amenities, and location advantages. From elegant waterfront residences to contemporary urban retreats, these top luxury condo developments showcase the best of Ottawa's upscale living. Whether you're seeking panoramic views, state-of-the-art amenities, or proximity to vibrant neighbourhoods, the Ottawa luxury condo market has something to suit every discerning buyer's taste. Explore these remarkable developments, immerse yourself in the luxurious lifestyles they offer, and find your perfect haven in the heart of Canada's capital city.

Why Invest in Condos in Ottawa? The Benefit of a Booming Condo Market

The capital city of Canada is home to a booming real estate market - with a steadily increasing population and a high demand for housing. Despite the recent dip in the market, Ottawa remains a seller’s market with a high level of interest and a low level of inventory.

Ottawa is also a condo-centred city, with tons of options for all lifestyles and budgets. Condos continue to pop up in the city every day, with new projects continually proposed. The demand for easy, downtown living is clearly high here and continues to grow with the population.

Economic Growth

Ottawa has a stable economy and a low unemployment rate, which is always good news for real estate investors. Ottawa has a very diverse economy, with plenty of large sectors in the area including government, tech, healthcare, and education. This stability has contributed to a steady increase in property values and eligible tenants.

High Demand

Ottawa’s population has been steadily increasing over the years, and will continue to do so as Canada and Ontario particularly continue to welcome more people. Condos in particular have become more popular in Ottawa because of their affordability and convenience. Many people in the city are looking for small and affordable living spaces. Furthermore, homes that are close to the action of downtown - whether that be work or shopping, dining, and entertainment. They also fix a lot of the problems that come from Ottawa’s harsh winters. In condos, snow removal is covered by the building, parking is typically inside, and there are often amenity spaces to host friends outside of your home without having to travel.

Rental Market

Another reason Ottawa is a great place for investing in condos is that Ottawa is a major rental city. From a high student and young-professional population, there are plenty of renters in the city who are looking for small, affordable, and temporary properties in the area. Condos, additionally, are an excellent choice for investors anywhere because they offer low-maintenance, turn-key investments that typically bring in more income than residential rentals.

Amenities and Lifestyle

Ottawa is a great city for condo investments too because of the amenities and lifestyle that are offered in so many of these buildings. Condos not only reduce a lot of the maintenance and housework that can be a deterrent for renters (like shovelling snow, parking outside, gardening, and more), but they also offer a lot of great options to replace what a condo unit may lack compared to a residential home. Condos often have party rooms, pools and hot tubs, and gyms - meaning residents don’t have to leave the comfort of their homes to host parties, swim or relax, or workout. All of these lifestyle additions are a huge attraction for tenants.

2022 Condo Market Recap with Mitch MacKenzie

The change in the condo market from 2021 to 2022 is a nuanced one. We started the year with an exceptionally fast paced market, and ended with a more slow, balanced one. Mitch MacKenzie has taken the time to pull statistics from the past two years in the Ottawa condo market to give us a better understanding of how trends are looking into 2023. 

Here is the area of Ottawa we are working with for these statistics. 

In 2021, there were 983 condo sales in the city limits. In 2022, we saw a drop of only 6 units, for a total of 977 condo sales throughout the year. 

The average price of condos in the city actually rose considerably, up $23,465 from 2021. The median price rose even higher, $28,500 more than 2021. 

Below is a breakdown of the prices we saw in studio, 1 bed, and 2 bedroom condos within the city limits this year and last, to show where the increases are most prevalent, and which months we saw large increases. 

So now, let’s look into the two halves of the year. As mentioned earlier, 2022 was categorized by two distinct half-years with very different market conditions. 

In the first half of the year, there were twice as many houses sold as there were in the second!

It does seem like the market is slowing down considerably, but for the time being, demand is still high! Mitch breaks down what a buyer’s and seller’s market means - and due to our inventory being 1.86 months as of the start of 2023, we’re still in a seller’s market! This means there are considerably more buyers at the moment than there are sellers. 

Now, let’s take a look at the days on market for each quarter of the past two years. We’re seeing that the 2021 average was actually higher every quarter, except for the fourth quarter, where the days on market averaged out the same. 

Mitch explains that although lending has been tightening over the last year, this has actually impacted the residential market a lot more than the condo market, as more residential buyers have been forced down to condos and less condo buyers can move up into residential.

Mitch has some property suggestions for buyers, take a look at the links below! 

Detached homes in the mid 500s

Townhomes in the high 400s, many of which were priced at well over 500k in the past few years.

Condos in great locations in the city.

Mitch MacKenzie

New Purveyors’ resident condo expert.

mitch@newpurveyors.com

Selling Your Condo in Ottawa in the Winter

If you’re cautious about selling your Ottawa condo during the winter season, you’re not alone. You’ve probably heard that the winter is a slow season, that people typically aren’t looking to move, or that you’d be wise to wait until the spring. However, that isn’t always true. Let’s break down some of the pros and cons of selling your condo during the winter season.

Pros:

Although there are fewer buyers shopping in the winter season, those who are are more serious about finding a home. You can assume if they are looking during the winter ‘slow’ season, that it is imperative they move relatively soon! Because of this, you may actually get away with fewer showings and more interested parties earlier on.

Because the winter market is slow, you’ll also have fewer competitors in your specific market. During the spring, you may find that plenty of condos similar to yours are on the market. In the winter, you may be the only one, meaning you’ll have more interested buyers coming right to you.

Another benefit of starting your journey to sell your condo in the winter is it gives you more time if you need it. If after meeting with your real estate agent you realize you’d like to upgrade the floors for example, even if it takes longer than expected, the market is heating up as you do it, so you’ll still benefit from an easier sale. If you decided to do the same in the summer, you might have the opposite.

Finally, after the holidays, we typically see an increase of people browsing for new homes. It’s a great time to be on the market because your home will be seen by a large number of people who are getting started on their buyer’s journeys!

Cons:

Despite these benefits, there are definitely some ways that selling a condo in the winter is difficult. First and foremost, the exterior of your building and any outdoor amenities may be hard to photograph for your listing. You may be able to bypass this if your real estate agent has previously listed a home in your condo, or if they have connections to the building and can access photos from the initial marketing of the building. Snow and ice typically don’t perform well, and some outdoor amenities may be totally closed off.

A second issue with the snow and ice is keeping your home clean while potential buyers visit for showings or open houses. A pro tip from our team, get a large and thick rug for your front entrance to give people adequate space to remove their shoes!

Although fewer buyers mean more serious buyers, it also means that your property may be on the market for longer than you’d like. If you’re looking for a quick closing, you’ll need to work with your real estate agent to create a plan to try and get that done.

Winter is also cold and flu season, meaning you may find more showings getting cancelled, and you may be at a larger risk of getting sick by welcoming so many people into your home. We always offer our clients hand sanitizer for all showings and open houses, but there is definitely more risk during this season!

Overall, there is no one perfect time for everyone to put their property up for sale. If you are considering selling, the best thing that you can do is work with an expert realtor who can help develop a plan for you and your property based on your needs! Whether you’re prioritizing a high-priced sale, a quick closing, or are just testing the waters… working with an expert will help you ensure you’re making all the right choices.