Why there is No Condo Crisis in Ottawa
With towers of condos edging out more of the beautiful Toronto sky every single day, this worrisome market naturally has caused others to start looking at surrounding markets – and becoming concerned that the overbuild that’s happened in Ontario’s capital could happen in other areas too. Couple that with the fact that many Ottawa condo developers have started advertising real incentives for purchasing certain condo units within the city, and the answer seems clear to many. Ottawa has now found itself in the middle of a condo crisis, just like its southern counterpart, Toronto.
Now, one real estate agent in the nation’s capital is challenging that, saying that just because something happens in Toronto doesn’t mean it affects the rest of the province. And just because more condo units are going up in Ottawa, it doesn’t indicate the fact that this is a city in crisis.
That real estate agent is Matt Richling, from Re/Max Metro City Realty Ltd. While he doesn’t deny that there’s a slight jump in the numbers from last year to this year, he does say that there are other reasons for it. And that those reasons have nothing to do with factors that would indicate a crisis.Those numbers when it comes to condos were at 540 new listings in September 2012. This year they’ve edged up marginally to 563.
“We are not a crisis point,” says Richling. “Yes, we are seeing price decreases and we do have more stock on the market that we have had, just like other markets. But there is no huge difference between this and last year’s figures so I think these stories are more for scaremongering than anything else.”
And he says, while the buying appetite in Ottawa may be changing, developers are starting to offer different types of units to reflect that.
“Of course, the market has changed and developers are changing their offering to reflect that, such as smaller-sized units,” he continues. “With prices decreasing, many are holding off on buying as they wait to see if it will drop more. That is the nature of the industry, but we have had one of the busiest years yet so that says it all as well.”
So where does all the bad press come from? Why is the media so quick to jump on this seemingly emerging trend as though it spells utter disaster for the condo market in Ottawa? Richling says it’s because a very small percentage of buyers and investors have purchased hoping to flip the property within a very short time period. That hasn’t happened, and those investors will have to rethink their strategies, he says. But it doesn’t indicate that there is a major crisis within the entire city, or even among the majority of buyers on the market right now.
“Most of the negative media coverage has focused on those who bought and renovated and now can’t sell,” he says. “That is just not reflective of the local economy. We always tell investors that the best returns are three to five, or longer, terms. This is the new norm.”