Ottawa's slower condo market means good news for buyers

If you’ve been thinking of getting into the Ottawa condo market, whether it’s to buy your first property or downsize from a house to something smaller and easier to maintain in your retirement years, there is potential good news to be found in some of the recent sales figures for our area.

As you may have read in media reports, the Ottawa condo market was a little cool in recent months. Some are attributing that to an over-supply of units. New condo projects seemed to pop up on almost every vacant corner in recent years as part of a condo-building boom.

The Ottawa Real Estate Board reports that there were more condo units for sale in Ottawa in the first few months of the year than over the same time in 2013. There has also been a slight decline in the number of condo sales over the period. During the first three months of 2014, condo prices declined 1.4 %, to an average of $258, 500.

In a press release looking at the Ottawa sales figures for May, Real Estate Board President Randy Oickle described the recent condo market as “a bit sluggish. We’re seeing a 19 per cent increase in the amount of inventory on hand over this time last year and unit sales are down 7. 1 %.”

If you are trying to sell a condominium unit, it means you are facing more competition with other sellers and it means it can take a little longer to sell than it once did.

But while the media reports tend to talk mostly about the over-supply on the condo market, they don’t always point out the potential good news for buyers: If you are looking for a property at an appealing price, your buying power is better than it would be in a hotter condo market. This could be a great time to consider buying.

Prices have dropped, buyers can get a good deal and owners are more likely to negotiate on price. They will perhaps be a little hungrier to accept an offer than they might have been a few months ago.

As Ottawa Real Estate Board President Randy Oickle said in early June, “if you are looking to buy and hold, the selection and prices are attractive. We encourage buyers to consult one of our member realtors to get advice customized to their specific needs.”

In addition to increased buying power, there are other factors that make buying a condo an appealing option at the moment, including the current low interest rates on mortgages and Ottawa’s low vacancy rate for apartment rentals, which can make it difficult to find a rental unit.

In my three decades in real estate, I’ve noticed that buyers sometimes wait to purchase until the market is going up, when everyone is talking about buying and there is also more competition among buyers. But really, buyers can do better when the market is a little softer and they can find a better value. If you’re a buyer and you want to be ahead of the game, it makes sense to buy when not as many other people are buying. This lets you take advantage of increased negotiating power.

As well, though sales have softened somewhat, one of the reasons that many people enter the condo market has not changed. The average price for a condo unit is considerably less than the average price for a detached house, making it a more affordable option for those who would like to enter the market. The Real Estate Board says the average sale price for a condominium-class property sold in May was $280,661. The average sale price for a residential-class property was $401, 626.

And keep in mind that although the market has cooled a little, condos are still selling steadily.

In the first four months of 2014, according to the Ottawa Real Estate Board, 825 condo units sold on the Ottawa market. In May, there were 303 sales.

From what’s been selling, I’ve noticed that demand is still solid for condos in the range of about 1,100 square feet or larger. Units of that size that are priced realistically are still in demand. The smaller-sized units of maybe 500 square feet or so, which many developers have been building, seem to have been less in demand in recent months.

If you’re interested in learning more about the current condo market, feel free to contact me. Having lived in a condo for many years and having sold condo units in many areas of the city, I can talk about some of the advantages of condo living and offer some insights on the current market, current prices and properties that might be suited to you. You can contact me through nancybenson.com or at 613-747-4747.