Ottawa-Gatineau Housing Market

[phil235]

Originally Posted by SF Thomas

I've been looking at real-estate listings on and off and have seen town homes listed in neighbourhoods like Manor Park for $350k to $400k. Its just 5km from downtown, and you can bike in 15 minutes or bus in half an hour.

You bike much faster than I do.

[YOWetal]

Originally Posted by OTSkyline

Yes, unfortunately inner-city or central houses/townhomes are unfordable for most people. To me, I would much rather be central part of town and buy older and renovate than to buy new-build in the 'burbs, but that's not really possible.

I drove around this weekend and stopped at many homes/townhomes that had a for sale sign on the lawn and that were pretty central. Unfortunately, even though many of them were small and very old needing much repairs, all the prices were in the $600-800K range.

Actually, I think a lot of people can afford $600k or even $800k in Ottawa. At least if we are talking a two income professional couple. I think people in Ottawa are just cautious. (which is not necessarily a bad thing) In some case there might be significant student loan debt but your typical professional couple in their early thirties can afford to buy a substantial house in Ottawa. A police officer and someone making the new minimum wage can probably afford to borrow $600k for example. Two government workers with 5 years experience can most likely can afford that $800k townhouse. For $800k you should still be able to get a move in ready townhouse even in the Glebe or New Edinburgh.

[acottawa]

Originally Posted by YOWetal

Actually, I think a lot of people can afford $600k or even $800k in Ottawa. At least if we are talking a two income professional couple. I think people in Ottawa are just cautious. (which is not necessarily a bad thing) In some case there might be significant student loan debt but your typical professional couple in their early thirties can afford to buy a substantial house in Ottawa. A police officer and someone making the new minimum wage can probably afford to borrow $600k for example. Two government workers with 5 years experience can most likely can afford that $800k townhouse. For $800k you should still be able to get a move in ready townhouse even in the Glebe or New Edinburgh.

I think you're overestimating incomes or underestimating the current mortgage requirements of banks.

[YOWetal]

Originally Posted by acottawa

I think you're overestimating incomes or underestimating the current mortgage requirements of banks.

I might be over-estimating the percentage of professional couples in Ottawa but I in fact under estimated the buying power of at least my second fictional family. An EC5 which is a basic entry level government policy job in Ottawa after five year pays a salary of $94k. Putting $50k down BMO using the posted rate (which is the qualifying standard but you would crazy to pay) says a couple who makes a combined $188k a year can afford a $900k house.

[McC]

5 years into a federal PS career with a post-graduate degree and/or professional designation definitely puts you on a good path. But in the real world, what proportion of such couples have:
1-no student debt
2-no consumer debt
3-$80-160K in liquid equity for a down payment, and
4-are willing to dedicate such a substantial portion of their net income to housing costs,

and forego “luxuries” like travel, fancy dining out and entertainment, having a family, etc., and have been so abstaining for their adult lives to date? Because otherwise how did they get 1-3 above unless they are independently wealthy; and if they are independently wealthy, then their career states are not determining factors in their ability to afford housing.

[McC]

Don’t get me wrong, we voted with our wallets to live centrally, and believe it’s worth the investment. We also believe it’s more affordable than many people realize because they don’t properly value their time and transportation costs. You alsoalso don’t need to spend $800K to buy in to this lifestyle. But big benefits like fancy shops and restaurants in walking distance, and going to the farmers’ market, and such, depend on some disposable income leftover after your housing costs.

[acottawa]

Originally Posted by YOWetal

I might be over-estimating the percentage of professional couples in Ottawa but I in fact under estimated the buying power of at least my second fictional family. An EC5 which is a basic entry level government policy job in Ottawa after five year pays a salary of $94k. Putting $50k down BMO using the posted rate (which is the qualifying standard but you would crazy to pay) says a couple who makes a combined $188k a year can afford a $900k house.

An EC05 is not a basic entry level job in most government departments (maybe some of the elite recruiting programs). 50k is below the minimum down payment under the current rules. They would also be required to demonstrate they can afford a 5 year fixed mortgage at the posted rate (currently 5.something). And as McC says, student or consumer debt would lower the threshold.

[AndyMEng]

Originally Posted by Vixx

I think a lot of it has to do with people not wanting or willing to do renovations buying in an inner city suburb.

Sure you could buy a home for around 400k, however if it needs 100k in upgrades to make it look modern, coupled with the surprises and stress that comes with renos, in a "non-posh" neighbourhood, then most will opt with longer commutes but a new build in a new area.

Your comment reminded me of this article, which is great:

https://www.curbed.com/2018/3/7/17087588/home-renovation-unnecessary-mcmansion-hell-wagner

And all y'all suburb dwellers should pay attention to this website to learn a thing or two:

http://mcmansionhell.com/

It's disgustingly offensive and sarcastic, but I truly believe in the end that people could learn a thing or two.

I'm not going to get into the Mortgage Cost vs. Transportation Cost(s) (Money AND Time)...

[acottawa]

Sorry for over posting.

The other problem with new construction is everything is built at or below minimum code, so in the not-too-distant future significant renovations will likely be required. At least with older homes the need for renovations are usually factored into the price.

[nortey35]

Originally Posted by YOWetal

An EC5 which is a basic entry level government policy job in Ottawa after five year pays a salary of $94k.

Sorry for deviating from the thread, but it seems crazy that someone starting at 60k will be making 94k after 4 years. That's 6.8k salary increase every year. That's more than what the salary progression of a software engineer (working for a Fortune 500 tech company) in this city is. Are you sure that's how this works?
I looked here https://www.tbs-sct.gc.ca/agreements-conventions/view-visualiser-eng.aspx?id=4#tocxx37162 and they list some sort of steps to get there. Not sure what those steps mean, or what the timeline is (it's a bit cryptic to understand like most info in government websites).
I would think a basic policy analyst with 5 years experience in the government will making 80k tops. The people I know with this types of jobs and experience certainly don't look or behave like they are making close to 100k.

[acottawa]

Originally Posted by nortey35

Sorry for deviating from the thread, but it seems crazy that someone starting at 60k will be making 94k after 4 years. That's 6.8k salary increase every year. That's more than what the salary progression of a software engineer (working for a Fortune 500 tech company) in this city is. Are you sure that's how this works?
I looked here https://www.tbs-sct.gc.ca/agreements-conventions/view-visualiser-eng.aspx?id=4#tocxx37162 and they list some sort of steps to get there. Not sure what those steps mean, or what the timeline is (it's a bit cryptic to understand like most info in government websites).
I would think a basic policy analyst with 5 years experience in the government will making 80k tops. The people I know with this types of jobs and experience certainly don't look or behave like they are making close to 100k.

Step increments (left to right on the table) are done annually - in addition to the generalized annual increase (top to bottom on the table).

Public sector wages have gone up pretty dramatically in recent years.

[1overcosc]

Originally Posted by YOWetal

I might be over-estimating the percentage of professional couples in Ottawa but I in fact under estimated the buying power of at least my second fictional family. An EC5 which is a basic entry level government policy job in Ottawa after five year pays a salary of $94k. Putting $50k down BMO using the posted rate (which is the qualifying standard but you would crazy to pay) says a couple who makes a combined $188k a year can afford a $900k house.

The average combined household income in Ottawa is around $95k.. so this hypothetical example of yours works only for people at double the average.

[DogsWithJobs]

EC5 is not entry level. There are development programs where you start at a lower level and routinely get promotions but even with that you are not going to be at the top of EC5 within 5 years.
The rows with dates are based on cost of living index. Which finally got agreed upon after being out of date for 4 years (salaries have been frozen for 4 years essentially, albeit backpay is given, but basically the government had a 0% interest loan on that increase in salary you were not receiving for 4 years).
Once you reach the last step (in the case of EC there are 5, corresponding to the columns in the table, and you move up one per year) you no longer receive any salary increases other than the cost of living index unless you get a promotion, so you do not get salary increases indefinitely.
Either way I don't know any ECs who started as an EC5 right out of school.

[HighwayStar]

Originally Posted by DogsWithJobs

EC5 is not entry level. There are development programs where you start at a lower level and routinely get promotions but even with that you are not going to be at the top of EC5 within 5 years.
The rows with dates are based on cost of living index. Which finally got agreed upon after being out of date for 4 years (salaries have been frozen for 4 years essentially, albeit backpay is given, but basically the government had a 0% interest loan on that increase in salary you were not receiving for 4 years).
Once you reach the last step (in the case of EC there are 5, corresponding to the columns in the table, and you move up one per year) you no longer receive any salary increases other than the cost of living index unless you get a promotion, so you do not get salary increases indefinitely.
Either way I don't know any ECs who started as an EC5 right out of school.

This statement CLEARLY defines the entitlement mentality of PS employees... whereas those of us in the private sector typically have to "earn" our increases through merit.

[OTSkyline]

^I'm a 27 year old young professional, great credit, no student loans, good yearly salary but what kills me is that I'm single and not a 2-person household, so the entire mortgage, taxes, fees fall on me and can't be split...

Who knew being single would be so expensive.. Anyone have a handsome brother or cousin that might be on the market? haha

[1overcosc]

Originally Posted by HighwayStar

This statement CLEARLY defines the entitlement mentality of PS employees... whereas those of us in the private sector typically have to "earn" our increases through merit.

? In the tech sector, regular cost of living adjustments are common. At my brother's company, they give out automatic raises every March; the size of the raise depends on performance and only those on probation are not given any raise at all.

[1overcosc]

Originally Posted by OTSkyline

^I'm a 27 year old young professional, great credit, no student loans, good yearly salary but what kills me is that I'm single and not a 2-person household, so the entire mortgage, taxes, fees fall on me and can't be split...

Who knew being single would be so expensive.. Anyone have a handsome brother or cousin that might be on the market? haha

I'd help but I'm taken aha.

On a serious note, I think single people should pay a lower tax rate to help out with the problem.

[McC]

or, you know, get a room-mate.

[DogsWithJobs]

Originally Posted by HighwayStar

This statement CLEARLY defines the entitlement mentality of PS employees... whereas those of us in the private sector typically have to "earn" our increases through merit.

Everything increases with inflation otherwise you are effectively seeing a decrease in your salary.

As for the annual steps I'd say you'd have an argument there sure. Plus there are no bonuses outside of upper management so there is no way to reward or punish based on performance.
The only plus side is those meritless increases do stop after a few years (varies based on classification), so only the higher performers would (ideally) be the ones promoted to a new level.

[acottawa]

Clearly many private sector companies give cost of living increases (maybe this is less common with small businesses).

While it wasn't too far in the past that public sector workers were underpaid, I think the pendulum has swung too far the other way. Unions have become adept at getting extra increments (effectively getting increases well above inflation) and gaming arbitration processes.

And back on topic, these increases are clearly skewing the local housing market. With interest rates rising housing prices should be stabilizing.