During a stopover in Ottawa in late summer, Toronto-based condo developer Brad Lamb made it clear he believed condos were a commodity on the rise – literally and figuratively – in the National Capital Region.
After years of overbuilding that created a condo glut earlier in the decade, Lamb predicted developers would soon be scrambling to meet pent-up demand in a red-hot market with a robust local economy and a housing supply that was still relatively affordable in comparison with larger centres such as Toronto and Vancouver.
“As the inventory gets down close to zero and it tightens up, you’re going to see more and more developers announcing projects,” said Lamb, adding he was hearing “bold new ideas” for future properties in Ottawa.
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“Part of it is price, but more of it is a general sense of well-being. If you feel that you’re going to have a job tomorrow, you might rent. If you feel you’re going to have a job in three years, you might buy. You make long-term plans. I think people in Ottawa were not making long-term plans four years ago, maybe even two years ago, but now they are.”
And as a result, so are condo builders. Lamb’s second local development, the 20-storey, $90-million SoBa development on Catherine Street, features 209 suites and is slated to open in February.
The man known as Toronto’s “condo king” is among several developers set to bring new properties on the market or break ground on condo projects in Ottawa in 2019, keen on delivering new product to a market with Ontario’s highest annual median income at more than $86,000 and an unemployment rate south of five per cent.
Mastercraft Starwood, for example, says it will put shovels in the ground later this spring on its long-awaited Soho Italia building. The 30-storey, 250-unit project at 500 Preston St., just steps from the Carling LRT station, has been in the planning stages for more than half a dozen years and now appears to finally be a go.
A block south at the corner of Preston and Carling Avenue, Claridge’s 45-storey Icon tower is taking shape. The 147-metre highrise will be Ottawa’s tallest building when completed, and is an apt metaphor for a condo market that’s trending upward again.
Rick Eisert, a broker at Royal LePage Team Realty and a past-president of the Ottawa Real Estate Board, said condos – particularly in the more affordable $175,000-to-$350,000 range – are being snapped up at a rate that could exhaust the city’s supply before too long.
Two months’ inventory
Local realtors sold 101 apartment units in that price bracket in November, Eisert said, representing two-thirds of all condo transactions in the city. With just 198 listings in that segment left in Ottawa’s resale inventory, he said that equates to roughly two months’ supply.
The condo glut of a few years ago has “all been eaten up and there’s very little left,” the veteran realtor explained. “It’s ridiculous.”
The market has become just as tight for newly built units. According to the Canada Mortgage and Housing Corp., the total number of completed and unsold condos in Ottawa has plummeted from nearly 700 at the beginning of 2016 to just 176 in November, the lowest total in nearly four-and-a-half years.
“Demand has strengthened, both on the new home market for condominium apartments as well as on the resale front,” says Anne-Marie Shaker, a senior market analyst with CMHC.
Industry insiders say tougher mortgage rules and rising interest rates mean people looking to jump into the housing market for the first time are increasingly turning to condos as a way to get their foot in the real-estate door.
“It truly is now the most affordable option,” said Ross Tavel, an agent at Coldwell Banker Sarazen Realty. “I think people are more comfortable with condos. Young people want to be in the market, and this is truly the best avenue for them. The baby boomers are taking a lot longer to get into the condo market, but they certainly are fuelling it as well.”
Eisert says with the federal government continuing to add to its payroll and the downtown tech sector on a roll, 2019 could be the year of the condo in Ottawa.
“There’s reasons for people to want to move to Ottawa, and part of it too is that we’re still No. 1 in terms of affordability nationally,” he says. “We have lots of buyers coming into the market. Two months of inventory, that’s not a good market for anybody to be in. In order for us to have a healthier market, we are going to need more inventory.”
“(The condo market) is incredibly affordable in their eyes.”
Tavel agreed, saying he’s “bullish” on the local condo market’s prospects for the year ahead.
“There seems to be this migration of people who are saying, ‘Ottawa, there’s jobs there,’” he notes. “They’re coming with money; they’re getting good jobs. These are people who want to be downtown, they want to be central. To them, relative to where they’re coming from, (the condo market is) incredibly affordable in their eyes.”