Ottawas Condos Team Blog
Chinese Investors In Canada's Condo Market
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Back in 2013, the Chinese government decided to crackdown on their very own housing bubble. This included implementing stricter regulations on the 20% capital gains tax for property sales as well as increasing down-payment requirements for mortgages on second homes. Chinese investors, both commercial tycoons and yearning homeowners, needed a new place to go and spend their money.

Meanwhile, housing sales in Canada were on the decline. The country’s largest condo markets, Toronto and Vancouver saw a 7.8% and 25.5% drop respectively in existing high-rise and apartment sales. It was around this time where the Chinese saw potential to capitalize in Canada and began investing in the Canadian real estate market. In recent months, this effect has been accentuated since China’s turbulent stock market has become virtually unprofitable for investors. Therefore, their citizens have even more incentive to buy into Canada’s real assets.

Foreign funding, from any nation, has started to fuel Canada’s housing market with the average investment from a Canadian citizen or permanent resident at $735,000 versus the staggering $1,157,000 from buyers abroad. However a more shocking statistic from a recent study in British Columbia showed that 76.6% of foreign buyers for residential properties were from China. Furthermore, Chinese buyers are the largest foreign investors in Canada, holding 65% of the market within the first six months of 2016. This works out to be $1.3 billion, compared to the $309 million at this time last year.

What Is So Appealing From A Social Perspective?

There are of course more reasons for Chinese investors to purchase real assets abroad. Many of the Asian middle and upper class have enough money to establish a decent lifestyle in Canada where the way of life is slightly more refined.  Many Chinese immigrants actually perceive Canadian tendencies to be generally more ethical and respectful than in their homeland.

Pollution plays another strong role. In China, AQI indices are checked regularly to predict the intensity of grey skies and smog. In stark contrast, Canada is known for its fresh air and plethora of outdoor activities. Living in a society where surgical style face masks are uncommon is truly enticing, not only for enjoyment but also for one’s overall health.

Statistically speaking, Chinese citizens have the second highest population out of the total number of Canadian immigrants, next to the United Kingdom. Furthermore, upwards of 1.5 million Canadians are of full or partial Chinese descent. With such a large Chinese community across the nation it has proven to be quite easy for Chinese immigrants to assimilate into society. Some actually say they hardly feel like foreigners at all thanks to the strong sense of openness and pride amongst local Asian communities.

Canadian Developers Working In China’s Favour

When developing a condominium in Canada, lenders want a sense of security, generally asking for builders to sell around 70% of the building’s units before initiating construction finances. With so many condo projects nationwide, including over 115,000 individual units scheduled for completion in Toronto, developers have been heading directly to China to pursue foreign buyers.

Canadian real estate agents, who usually have ties to China, regularly travel to Beijing and Shanghai to showcase new developments to upper class families and other potential buyers. Macdonald Realty Inc., a Vancouver based broker, actually has a sales office set up in Shanghai to sell Chinese investors a variety of condos units in Toronto, Montreal and the west coast.

Developers see this tactic as a great business strategy given the increased competition in the Canadian condo market and the never-ending announcements of new developments. Nevertheless, heading directly to Chinese investors is making it easier than ever for them to purchase properties without thinking twice. Not only does this add to the housing bubble but there is no sign of foreign buyers slowing down as long as developments continue to be built.

The Current Situation: Canada’s Market Vulnerability

What does all this Chinese investment mean for Canada’s housing market? With foreigner buyers, including Chinese investors, snapping up condos, supply decreases and prices are boosted. This leaves little leeway for Canada’s domestic population who are now struggling to afford a home for themselves. Prices for both single-family houses and condo units have risen dramatically over the past few years and local Canadians are suffering.

The best example of this is in Vancouver, where only a decade ago people of all ages could live a nice and comfortable lifestyle downtown. Now, home ownership is basically beyond the reach of the younger population. Nevertheless, over 10% of condos in the west-coast city remain vacant. This is partially because over the years foreigners have invested in properties with no intention of inhabiting them. Sadly, locals want to live in these empty units, but foreigners beat them to the punch with their higher bids.

Although a vacant home tax has been proposed for this specific issue, economists worry about how the Canadian housing market will react. It has reached a point of sensitivity that even the smallest change could send the industry over the edge. Imposing a special tax could decrease foreign investment, the main driver of the current market. Without foreigners to purchase condos, construction would surely slow and that would deprive the Canadian economy of countless jobs.

At a time where Canada’s dollar is weak and the market is delicate it is hard to predict what is best for the national economy. Foreign investment is proven to be important, but so is the Canadian population’s right to live in housing where inflation is at a fair rate. It is a vicious cycle and only time will tell how it will all play out.

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Five years ago the Minto Beechwood Condominiums would have been seen as outrageous to the local community of Ottawa’s New Edinburgh. The intersection of Beechwood Avenue and MacKay Street was dotted with low-rise apartments and many small businesses like Hamie’s Diner, Lester’s Your Neighbourhood Barber Shop, Time Sharpening and The New Edinburgh Art Gallery. However, a five-alarm fire sparked inside the bordering Home Hardware left 12 locals homeless and caused extensive damage, mostly beyond repair, to the block.

Now, half a decade later, the fire’s destruction is well in the past. Minto Communities has successfully turned a devastating story into the forward-thinking Minto Beechwood Condominiums. The 129-unit development at 411 MacKay Street is nearing completion and ready to open its doors to eager condo owners in the last half of 2016. The building stands 8 1/2 storeys high, the perfect height to ensure that the view of Parliament Hill is still visible from the Beechwood cemetery, an important aspect of one of Ottawa’s oldest neighbourhoods.

Yet, despite Minto Beechwood Condominiums’ favourable outcome, the community-oriented population was not always welcome to the idea of a mid-rise development. In 2013 the original proposal was a huge topic of conversation for The New Edinburgh Community Alliance (NECA). They were quite opposed to the plan, stating that is was perhaps too large and tall to fit in in the village-like neighbourhood.

Soon-after, Toronto’s TACT Architecture reached out to the local community to win their approval. After much collaboration, they tastefully designed Minto Beechwood Condominiums to not only blend in, but brighten up New Edinburgh’s overall appearance and atmosphere. The neighbourhood’s local landscape was attentively taken into account when choosing warm and earthy tones as well as the masonry work, such as the buff stone, for the exterior.

The clean and contemporary mid-rise is seen as a much-anticipated revitalization for the area. New Edinburgh had experienced a slow decline in pedestrian traffic and local business since Mountain Equipment Co-op relocated to Westboro in 2000. For many years the neighbourhood has silently pined for an exciting restoration and Minto Beechwood has high hopes to do just that. The mixed-use development has an inviting 17,000 square feet of commercial space, welcoming retailers to open shop in the condo’s ground floor along the bustling Beechwood Avenue.

To further Minto Beechwood Condominiums’ practical-meets-modern niche, II BY IV DESIGN has fashioned a stunning interior look. Each individual unit is equipped with hardwood floors, caesarstone countertops, stainless steel appliances, porcelain tiles in the bathrooms as well as a private terrace or balcony. Recognized for its environmental outlook, Minto Beechwood has been decorated with low VOC white latex paint, acoustic cork underlay beneath the hardwood floors and energy-efficient appliances.

Nevertheless, Minto Beechwood Condominiums’ main draw is the kitchen. Through focus group research, Minto Communities found that condo buyers tend to find unit kitchens and appliances smaller than the typical single family house. So while small units come with gallery-style kitchens, most condos in this development have been designed with L shaped kitchens including a standard island and stainless-steel range hood. With a more welcoming and open feel, Minto Beechwood has marketed its units toward down-sizers, first-time home buyers and investors.

Units are sized between 560 and 1,602 square feet with pricing from $250,000 to upward of $1 million. Underground parking and individual storage lockers are also available at an extra cost. Minto Beechwood Condominiums is of course equipped with the usual communal amenities designed with extra taste and comfort. These include a fully furnished lobby, gym, lounge, dining room and rooftop terrace.

The Hideaway Condo Ottawa
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The Hideaway Condo Ottawa is now gearing up for final closing and "unit title transfer". The latest updates from the builder are estimating a registration and final closing date of April 25th 2015. The Hideaway has been in interim closing since November 2014. Interim closing is the time in between when occupants begin moving in to a specific building and when they officially close on the condo (title transfer date). During this time the soon to be owners pay the developer a fee for access to their units. This fee is a sort of rent and is comprised of a property tax, interest, and condo fees. This fee is not credited back to the purchaser on title transfer date.

In case you are not familiar, The Hideaway is an Urban Capital built condo in Downtown Ottawa. The building is jam packed with amenities and located in the trendy Centertown area. The amenities include, an outdoor pool with cabanas, a large BBQ at the lounge terrace, a gym, and a party room. The Hideaway is the third of the phases of the Central Condo development. The Central 1 condo is freestanding between Gladstone and McLeod, whereas Central 2 and 3 (Hideaway) are connected on McLeod St. Despite the buildings being separate and unique condo corporations, Central 2 and 3 (Hideaway) do share a few common elements. Namely the out door pool and terrace. These shared elements are documented in the condo bylaws.

Units are priced between $220,000 and $400,000 and typically rent in the range of $1100 - $2100 per month. The smallest 1 bedroom units are branded as Blue Palace units at 410 sqft, The mid size and likely the most popular units are the Lalu models at 609 sqft.

There are currently a few units left for sale and also for rent in the building. If you or anyone you know is interested in the Hideaway condos let me know.|_340_McLeod_St

School is now in Session
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With the number of enrolled students across Canada on the rise, and the cost of an education reaching new heights, investors should definitely consider this strategy.

Since 2000, the number of enrolled students across Canada has grown by 44%, reaching more than a million, according to the Association of Universities and Colleges of Canada.  The cost of an education in Canada is also on the rise, and investors catering to this market, are aware that they are renting not to the poor student, but effectively, to their wealthy parents, who are more and more prepared to pay a premium to ensure that nothing gets in the way of their children’s education.  In fact, the key to building a profitable and manageable student-housing portfolio lies at the high end of the student condo market.  These property types are a great option to both student and their parents for a number of reasons.


Student condos and purpose-built apartment buildings have cameras in all common areas, as well as onsite staff, which give parents piece of mind.  They also have security systems to control entry, as well as 24/7 video monitoring that protects the premises.

Professional Property Management

Managing 18 and 19 year olds who are enjoying their first taste of freedom can give landlords a headache worse than a morning-after hangover.  But you can eliminate this burden by having a professional property management firm handle your rental property on your behalf.


All the maintenance is handled by the condo, including snow removal, gardening, and cleaning common areas.

Preferred by the City

Condos are a preferred structure for municipalities.  Compared to illegal rooming, this structure ensures the building isn’t at risk of being shut down.

Fewer Rooms

Condos typically have fewer rooms than student houses.  Fewer rooms mean fewer students per unit, and a lower chance that damage and tenant issues will arise.  Condos are more desirable than larger houses with more distractions.

Pre-construction condos are one of the best ways to invest in student housing.  Purchased several years before students apply to schools, investors aren’t competing with parents on resale properties.  They often come with full rental guarantees and free or low-cost property management, making them a hands-off investment option.

5 Common Mistakes Homebuyers Make
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Buyers are often so focused on finding the desired property within their budget that they make unnecessary and costly mistakes.  Here’s a number to watch out for.

Not Hiring a Qualified Home Inspector

Just like any other profession – no two Home Inspectors are created equal.  Always be sure to research a variety of professionals.  Find out how they report back results and determine their level of knowledge with the type of home they are inspecting.  You want someone who will take detailed notes and pictures, provide guidance, and take the time to explain the various concerns/benefits of the home.

Ignoring the Value of the Neighbourhood

The neighbourhood in which a home is located in is often ignored.  Focus is usually on the features of the home, but what about access to transit, schools, shops, and highways?  How do the other homeowners maintain their properties?  Is the area in a state of growth, stability, or decline?  Does the house conform to the general area?  Is it the worst or best house on the street?  All of these factors can impact not only the current market value, but its anticipated future value.

Getting Caught up in Multiple-Offer Situations

A number of local real estate markets across Canada are experiencing high buyer demand with relative lack of active listings.  Typically, this trend will push home prices upwards.  This is often compounded by homes that are being priced below market value, and sellers not accepting offers until a specific date.  The purpose of these selling strategies in a hot sellers’ market is to encourage multiple-offer situations.  All too often, the end result is a buyer paying too much for a home.  As a homebuyer, be prepared to walk away from such a situation.  Allowing your emotions to rule your thinking may end up costing you more money than you should be otherwise paying for a home. 

Having Search Criteria that is too Broad

Home buying should involve the process of elimination, not addition.  It’s normal to begin the process with a fairly broad set of criteria in terms of home features, location and cost.  Once you’ve had the chance to view a couple of homes and build your knowledge base, then it’s time to make some decisions.  The more focused and efficient your search is, the more you’re likely to find the home you actually want.  When search criteria are too broad, we tend to get overwhelmed and have difficulty making meaningful decisions.

Not Hiring a Professional REALTOR

As in the case with every professional service provider, not all Realtors are made the same.  Do your homework.  Review Realtor websites, ask friends and family, and interview multiple Realtors.  A referral to a reputable Realtor can be a great source, but just because your good friend has a parent in the business doesn’t mean they’re a good fit for you.

Gotham Condos in Ottawa Move in ready
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The countdown to occupancy in on.

Built by Lamb Developments, the highly anticipated GOTHAM condo project in Ottawa is set to Occupy this April 2015. I had the pleasure to walk through the project last week (March 15th 2015) and the project certainly is everything it was cracked up to be 3 years ago when the building sales launched.

The attention to detail throughout this building is without a doubt, pound for pound the best in the city. With the prevalence of builders consistently fighting to keep costs down, it is a breath of fresh air to see all of the extras that the GOTHAM is offering. From the subtle accents – Elevator ceiling heights of 10+ ft, gas appliances, tinted exterior glass with a bluish hue, gas lines on all of the balconies and terraces, solid core doors, details in the casings and door trim – to the in your face 10ft glass doors that usher you into the building you will have no choice but to appreciate that Ottawa’s condo scene is growing up.

In terms of availability, the building is mostly sold out. The select units that remain unsold are a combination of builder units and assignment units. These unit are set to be ready to view and/or occupy in the next few weeks. My coles notes to keep in mind if you are considering a purchase in this building are 1) The 4th floor offers an extra ft of ceiling height and 2) Contact me for more information ;)

Units in the GOTHAM are priced from the low $200’s up the Mid $600’s. The floor plans offer from 400 sqft to 1400 sqft of living space.

Market Watch
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Members of the Ottawa Real Estate Board sold 853 residential properties in February through the Board’s Multiple Listing Service® system, compared with 868 in February 2014, a decrease of 1.7 per cent. The five-year average for February sales is 914.

“Even though we had one of the coldest months on record, resales for the month of February are only slightly down from last year,” says President of the Ottawa Real Estate Board, David Oikle. “Looking at residential properties alone, 13 more properties were sold this February over last February – a 1.9 per cent increase; while the condo market on the other hand, has been a little slower to gain momentum. That being said, both residential and condo sales are up a total of 226 combined units since January.

February’s sales included 168 in the condominium property class, and 685 in the residential property class. The average sale price of residential properties, including condominiums, sold in February in the Ottawa area was $358,206, an increase of 1.3 per cent over February 2014. The average sale price for a condominium-class property was $267,880, an increase of 3.8 per cent over February 2014. The average sale price of a residential-class property was $380,358, a decrease of 0.3 per cent over February 2014.

The hottest segments of the Ottawa market in February were sales between $300,000 to $400,000, followed by the $200,000 to $300,000 range, and $400,000 to $500,000 range. These price ranges continue to have the highest concentration of properties sold, while residential two-storey homes and bungalows continue to have the highest concentration of buyers. 

The Do’s and Don’t’s of Home Selling
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Now that the Spring selling season is fast approaching it is important to consider these do’s and don’ts when getting your home ready for market.  First impressions are everything when it comes to selling a home. Most people make up their mind whether or not they like a house within mere minutes of stepping foot inside. That is why it is crucial to make sure that you (and your home) put your best foot forward.

Don’t overdo it on the heat.

People tend to overcompensate when they know that potential buyers are coming to look at their home in the winter time. They crank up the heat to make the place warm and welcoming - but that can backfire. The air will be dry and stale, plus buyers will probably be too warm, as they will be bundled up in coats. To solve this problem, keep the heat at a reasonable setting and have your humidifier set between 40-60 percent.

Do consider curb appeal.

Curb appeal is a huge draw for buyers, even in February and March.  Consider creating a winter planter with cold-weather plants like winterberry, holly or noble fir. At the very least, invest in a new doormat and keep the driveway clear of ice and snow. Warm lights glowing in the window will also be welcoming.

Don’t expect people to use their imagination.

If you have a crazy color choice in one or more of your rooms, you might think that people will look past this, but that can prove difficult for buyers. Garish paint and wacky décor choices will make them uneasy, no matter how beautiful your home. Paint over wild colors and put away any crazy items that might garner a laugh or a raised eyebrow.

Do invest in updates that matter.

People will pay top-dollar for homes with updated kitchens and bathrooms. If you can make even the barest improvements to these rooms, you will see a huge return. Update the yellowing tile in the bathroom or invest in new cabinetry. At the very least, purchase new shower curtains, bath rugs, and the like.

Do keep it bright.

Open all curtains and turn on all the lights, even if it is the afternoon. Replace all dead light bulbs. Crack open doors to the pantry or laundry room so people won’t be afraid to peek inside. And tidy up in forgotten places like inside the fridge or oven.  People will be looking in there, and if they see mold or burnt food, they will be very turned off.

Parking Anyone??
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Parking spots are falling out of favour with many condo buyers, thanks to the proliferation of car-sharing services and a greater emphasis on transit and walkability by city dwellers.

Louie Santaguida, president and chief executive of Stanton Renaissance, had planned to build up to four levels of underground parking at his On The GO Mimico project, a condo development under construction in the western part of Toronto. However, Santaguida says most buyers snatching up the units pre-construction aren’t keen to shell out for parking, given that one of the building’s selling points is that it’s situated right next to a GO Train station that can transport residents downtown in minutes.

Santaguida is planning to apply to the city to have the building’s parking requirement reduced. “We’re hearing more and more about developments that are coming up along good transit nodes that are actually asking for leniency around no parking, or minimal parking,” he said. “The trend is moving away from vehicle ownership, especially in urban centres like downtown Hamilton, downtown Montreal, downtown Toronto and downtown Vancouver. Because there’s adequate infrastructure to get you where you need to go on a timely basis and quite frankly, in most cases, sooner than you can using a vehicle.”

Vancouver developer Jon Stovell, president of Reliance Properties, says the city of Vancouver has been encouraging developers to reduce the amount of parking that they build, in order to reduce traffic congestion and encourage other forms of transportation including walking, biking and public transit. “The parking ratios have been going down steadily for a long time, and they’re getting to some really low levels now,” Stovell said, noting that developers used to build up to two parking stalls per unit. Now, many are only building one parking stall for every two, condominium units.

In Toronto, Tribute Communities has erected a 42-storey condo tower with no permanent resident parking — just nine spots reserved for a car-share service. Knightsbridge Homes is proposing a similar development in Calgary.

The 411 on VTBs
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A VTB, or Vendor Take-Back is when the seller (vendor) of a property provides you with some or all the mortgage financing for purchasing his or her property.  A VTB can also entail the seller covering one or more of your closing costs such as land transfer tax, appraisal and survey or application fees. 

The maximum VTB that you can get from a seller truly comes down to what you can negotiate.  If you are arranging a VTB in a second position, meaning that you are going to an institution for your first mortgage, then the maximum you can use in a VTB is 10 percent of the purchase price.  Not all lenders do allow VTBs, so be sure to check with your mortgage specialist on who does and does not allow them.

The rate and terms on a VTB are negotiable as well.  In most cases, however, the seller will charge you an interest rate higher than what you would typically get through your bank.  This reflects the higher risks that the lender is willing to accept.  The terms on a VTB can vary from interest only payments with one balloon payment at the end of the term, or interest and principal payments.

VTBs offer many advantages to both the buyer and seller.  From the seller’s perspective the benefits of a VTB can include:

  • Monthly cash flow
  • Obtaining a higher price for their property
  • Tax Deferment
  • Ability to sell in a slow market
  • Avoiding pre-payment penalties on existing locked-in loans.

From a buyer’s perspective the benefits can include:

  • Ability to buy non-conventional and distressed properties
  • Increasing the return on investment
  • Ability to buy larger properties with the same amount of funds or less
  • Saving on the costs and time associated with traditional financing

Obviously, a VTB mortgage should always be entered into with caution.  It is complicated, and a lawyer should always be consulted to review all documentation and perform the necessary due diligence.  From a seller’s perspective, he or she is dealing with the risk of default.  From a buyer’s point of view there may be a risk of having to pay off a VTB mortgage in a lump sum if the seller dies, goes bankrupt or needs to liquidate his estate, if not drafted correctly.              

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