Ottawa: Canada’s Strong, Steady, and Stable Housing Market

ottawa canada housing market

By this point, the hype should have died down. This far after the U.S. election, people should be moving on with their lives rather than talking about moving out of the country.

It happens after every U.S. election cycle: One side wins, and a select few from the losing side say they’re moving to Canada.

This phenomenon knows no political stripes. Even unhappy Republicans declared they were moving to Canada to protest Obama’s 2012 re election… a country with gay marriages, gun controls, socialists, pot-smokers, and immigrants—all of the things they wanted to escape in the United States.

In reality, the odds of people actually moving this time around probably aren’t much higher than in the past; however, nothing is so sure these days. In fact, a recent report from Royal Le Page notes that (unlike with previous elections) interest in moving to the Great White North is still strong, well after the election.

Politics aside, Canada is held in high esteem by Americans… the highest in the world. Canada consistently earns a 92% favorability rating when graded by its neighbors to the south, according to an annual Gallup survey. Canadian people score even higher among Americans.

Political events may trigger your interest in moving abroad, but what sustains it is a First World environment with excellent infrastructure, stable government, a friendly, welcoming, and familiar culture, low crime, world-class health care, and reasonable prices. These are the factors that outlast presidents and political trends. And by these criteria, Canada is unsurpassed.

In Ottawa, You Can Enjoy Canada’s Highest Standard Of Living

Ottawa offers a lifestyle that’s hard to beat in a sophisticated and trendy environment. Serving as the nation’s capital, Ottawa is also the “most educated city” in Canada, with the country’s largest university-educated population.

Ottawa also offers low unemployment and the nation’s highest standard of living. Numbeo (an independent, crowd-sourced international database) ranked Ottawa second in the world out of 150 cities rated in their 2015 Quality of Life Index.

The downtown—including ByWard Market, Parliament Hill, and the Golden Triangle—is the center of the cultural scene and home to many boutiques, theaters, and galleries, as well as fine dining, cafés, bars, and nightclubs.

The culinary scene in Ottawa has blossomed over the past few years, too, with many restaurants and chefs gaining international recognition.

The Ottawa Market Remains Strong, Steady, And Stable

It’s tough to find an affordable big city among Canada’s housing markets these days. According to the Canadian Real Estate Association, the average price of a single-family home in December among Canada’s biggest cities ranged from CA$328,200 in Montréal (US$248,600) to almost CA$1 million in Vancouver (US$757k).

In Ottawa, the average was CA$373,200, or just under US$283,000.

In Toronto and Vancouver, million-dollar condos aren’t out of the norm, pricing out anyone without a small fortune or six-figure income. Regulatory action in the form of a foreign-buyer tax in Vancouver seems to have momentarily cooled off the market, but prices there and in Toronto continue to balloon into bubble-bursting territory.

Meanwhile, at CA$219,000 (US$166,000), Ottawa’s average condo price is the lowest of Canada’s five biggest cities.

Ottawa’s affordability and positive outlook make for a strong, steady, and balanced market. The city usually doesn’t get much attention from the press, though a recent headline in the Ottawa Sun proclaimed, “In a market of extremes, Ottawa housing is normal.”

Slow and steady growth makes for a good investment climate, but doesn’t make for attention-grabbing headlines.

Finally, for buyers wondering about how the somewhat sluggish Canadian economy might affect property values in Ottawa, there’s one important feature in Ottawa that no other city in Canada has: Parliament.

Ottawa is Canada’s national capital, meaning that there is steady and reliable demand for housing for the politicians, staffers, bureaucrats, visiting dignitaries, foreign ambassadors, policy think tanks, nongovernmental organizations, lobbyists, etc.

Examples Of What’s On Ottawa’s Market Today

bulletOne of the best deals on the market right now is a 180-square-meter condo with three bathrooms and four bedrooms. The ground-floor unit is bright, with plenty of sun shining through the massive windows throughout the rooms. The facility features a clubhouse, indoor and outdoor swimming pools, tennis courts, and a gym.

The condo isn’t located downtown, but is walking distance to important amenities like grocery stores. Annual condo fees plus property tax amount to around CA$4,800 (US$3,600), and the property is listed for CA$225,000 (US$172,000).

bulletA sophisticated loft-style condo in the hip area of Ottawa’s ByWard Market would be attractive to young professionals. The 75-square-meter, one-bed, one-bath unit is priced at CA$317,000 (US$242,000), with condo fees and property taxes totaling about CA$4,200 (US$3,200). The European-style kitchen, bamboo floors, and master-bedroom skylight make this condo a truly urban gem (with a nearly perfect Walk Score of 99).

bulletFor something a little more central, in Ottawa’s Centretown is a 105-square-meter, two-bed, two-bath condo for CA$299,000 (US$228,000). The condo is close to everything—shops and restaurants, Parliament Hill, the Rideau Canal (which, at 7.8 kms long, is the world’s largest skating rink in the winter), the University of Ottawa, and much more. The unit’s private balcony offers a breathtaking view of the city’s skyline.

bulletAnd if condo-living isn’t for you, there’s a 225-square-meter, four-bed, four-bath home on a finely landscaped corner lot for sale for CA$545,000 (US$407,000). With hardwood floors, a large rec room, a top-of-the-line kitchen, gas fireplace, tall ceilings, and wine cellar, this home would make the most of any host.

If You’re Buying With U.S. Dollars, You Have A Lot Of Buying Power Today

The Canadian dollar is down against its U.S. counterpart, and has been for about 18 months. Dropping as low as CA$1.46 per USD in January 2016, the loonie now trades for about CA$1.32. It might reach lower this year—or not.

Historically, the two currencies trade closer to par, with the U.S. dollar having a slightly higher value over time. This will benefit today’s buyers using U.S. dollars.

To give an example, if the exchange rate returned to CA$1.15 per USD—a reasonable scenario—the first condo I mentioned above would increase in value by almost US$25,000, aside from any property appreciation.

While most analysts predict a slow recovery for the loonie, currency markets can be erratic.

Today’s Buyers In Canada Have A Great Window Of Opportunity

If you’re considering Canada, I recommend you don’t delay. Not only could an eventual rising Canadian dollar close the window on today’s opportunities, but further price increases in Ottawa could, too. A recent report by the Canadian Mortgage and Housing Corporation explains that Ottawa’s prices are already affected by the spillover from escalating prices in the Greater Toronto Area, some 400 miles away.

For now, Ottawa does more than provide a refuge for those fleeing astronomical housing prices in Toronto or U.S. politics. It offers a low-crime, First World environment at reasonable prices, among friendly people in a familiar country.

Matt Chilliak
For Overseas Property Alert

Editor’s Note: When I first started writing Overseas Property Alert three years ago, Matt was my editor in Panama City.

Lee Harrison
Editor, Overseas Property Alert

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Letters To The Editor

Hello Lee,

With all of the anticipated interest in Mexico’s Baja, where will the potable water resources come from for all that growth?

From what I understand, that area is mostly desert with finite groundwater available for developing. There is only so much one can get out of recycled resources. Of course, salt water is plentiful, but desalination is super expensive.

So what’s the plan?

Thank you for your work. I always look forward to reading it.

Mike

Excellent question. There are plans to get around the problem, but water is a risk factor in Baja California.

In fact, both Mexican states in Baja (Baja California and Baja California Sur) are in short supply of water. In Baja California Sur (the second-fastest growing Mexican state), the capital city of La Paz is critical, with its only water supply suffering from saline intrusion. They’re counting on an aqueduct from El Carrizal (a short-term fix) and future plans for desalinization. Los Cabos is mostly hanging its hat on desalinization.

Baja California is not much better off, with desalinization in the cards for Rosarito, Ensenada, and San Quintín.

I treat water supply as a risk factor. Just as I would not want six properties priced in Colombian pesos, I would be mindful of properties whose water supply is at risk. Speaking for myself, I avoid having more than one property at risk on the same water supply… like the Colorado River, for example.

If considering a property in Baja (or anywhere, for that matter) make sure you know where the water is coming from, and any backup plans for the area as appropriate.

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Hi Lee,

I have followed you since several years and very much appreciate your many pieces of advice you have given to your readers.

Four years ago I purchased four, five-acre parcels in the lovely, off-grid eco-community of Los Árboles in Tulum, Mexico. There is no structure on any of them.

I have made several trips to this location and still love the extraordinary beauty and serenity of this gated eco-community, the nearby ocean with its famous beaches, and the ancient Maya temples and old culture of the area.

My life has changed, and I currently live in Ecuador. I’d like to sell three of my four parcels.

I was thinking you may be quite connected in Mexico in terms of knowing reliable realtors. Could you recommend a realtor in the Tulum area? I would greatly appreciate it.

Barbara

Yes, I’ve got an excellent contact in the area: Jim Hardesty. He’s an American expat living in Mexico, with extensive experience in the Yucatán, Quintana Roo, and Belize. In fact, I last saw Jim in Tulum. You can get in touch with Jim here.

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I am in my mid-40s, and while not ready to retire, I’m ready to pre-retire, i.e. live and work part time in Canada but perhaps make foreign investment.

My mother-in-law has retired to Ajijic, Mexico and that would be easy… but it is not a beach location which we’d love.

I am very interested in the Dominican Republic, but have also been looking at the Costa Maya (south of Tulum) as a possibility, since Tulum is getting too expensive.

Do you anything about this region?

Hemlata

Your mother-in-law’s choice, Ajijic, is one of the world’s most mature retirement destinations, with a large expat community and tons of amenities. With lots of English speakers, it’s an easy transition.

But the Costa Maya (today) is an expat frontier. So you won’t have any of the amenities that they enjoy in Ajijic. It’s relatively remote, although you’re still less than two hours from the airport.

That said, development is moving inexorably down that coast, starting at Cancún. In 20 years’ time, the area south of Tulum may be the next Playa del Carmen.

Have a question? You can write to Lee (or Matt) here.

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