Ottawa Housing Market – Is Borrowing Large Amounts of Money to Get into the Housing Market a Bad Idea?

Ottawa Housing Market – Is Borrowing Large Amounts of Money to Get into the Housing Market a Bad Idea?

The housing market in Ottawa is expected to grow, mainly due to a population influx and rise in demand. Home sales in the city have grown by more than 11 percent in February, 2017. The number of sales has grown for both, condo and residential properties. With an average price of about $300,000 – $400,000, buyers also benefit from the fact that there is more choice. Listings have increased by more than 2,000.

Ottawa’s Housing Market: Outlook

The housing market showed signs of vigorous activity in the beginning of 2017, with over 1,000 properties being sold in February alone. This is a positive trend given that about 870 properties changed hands in February, 2016. This trend can be explained by the construction of the right rail transit and the large number of DND workers in the west-end districts.

Does Borrowing Large Amounts Make Sense?

While purchasing a home is a preferred solution for many and conventional wisdom says to do so, there are some factors to consider. This is especially true when you have to borrow a large amount of money. The first factor is home prices, and the second – mortgage interest rates. When mortgage interest rates are low, it makes sense to borrow and save on interest (https://www.debtconsolidation-loans.ca/canadian-guide-to-bankruptcy-and-how-to-avoid-it/). A drop in home prices also allows buyers to save money. Other factors include your job and long-term employment perspective, where you live, and the amount you saved to make a down payment. Borrowing a large amount of money (above $500,000) means that you need to save 10 percent for the down payment. The 5-percent rule now holds for properties below $500,000. If you can save some 20 percent to pay down, that’s even better. Consider the closing costs as well as other costs like home inspection fees, appraisal and lawyer fees, land transfer taxes, and real estate agent costs.

Further Considerations

When it comes to housing prices in Canada, there is a negligible increase of about 0.5 compared to January, 2017. This means that prices are relatively stable which is good news for the housing market in the long run. While it makes sense to buy a property when prices are stable, there are some challenges that home buyers face. The financing costs are expected to increase because of regulatory changes. Moreover, Canadians find it more difficult to qualify for financing because of the new mortgages regulations that came into force.

Higher mortgage rates since the election of Donald Trump mean that the cost of borrowing has increased substantially. In fact, some experts note an increase of close to 30 percentage points. Even with relatively stable housing prices, affordability decreases at a much faster pace compared to income growth. This means that borrowing large amounts of money, especially if your income is low, can have serious consequences (https://www.debtconsolidation-loans.ca/). If you are in the high-income bracket, have a stable job or business, have solid credit, and find a reasonably priced property, than you may consider borrowing a larger amount of money. Other factors to take into account include family size, combined income, your partner’s job prospects, how much you already owe, types of debt, whether you have high interest credit cards (https://www.debtconsolidation-loans.ca/5-types-of-credit-cards-for-people-with-bad-credit/) and loans, and so on.

Finally, keep in mind that when housing affordability decreases, this is also true for renters. This means that you will pay more for the same property than you used to.

Ottawa – Improving transportation, local economy, and urban planning

Ottawa – Improving transportation, local economy, and urban planning

Transportation, urban planning, and local economy are important aspects of life everywhere, and Ottawa is not an exception to this. Improvements help enhance quality of life for residents, visitors, and tourists.

Improving Transportation

Accessible transportation options help reduce congestion in big cities and allow people to move freely, whether for business or leisure. There are things to be done in Ottawa to this end, like better network planning and improved bus service. The goal is to develop and maintain an affordable, reliable, and effective transportation system for everyone. Improvements also mean better safety and security and punctuality. In addition, higher volumes of transit ridership also help reduce pollution and improve air quality. Pathways and sidewalks help improve infrastructure and quality of life in the big cities. The same goes for amenities at intersections to make them more accessible and safer for pedestrians.

Policy makers focus on several areas to improve efficiency, travel times, and other aspects related to transportation. These include parking at major and busy locations, adequate locations for bus stops, construction of more train and bus stations, and better road infrastructure when it comes to signaling and signage. Improvements could be done to enhance amenities such as bike lines, shelters, lockers, and cycling infrastructure in general. Other amenities include garbage cans, public restrooms, lighting, benches, and more. It is also important that decision makers and other stakeholders develop strategies to encourage residents and visitors to use bus, train, and other means of transportation. Safety education is also a priority, especially for children and teenagers. There are different ways to achieve this, including awareness raising, campaigns and public education, outreach, and others. Employee travel plans also encourage commuters to use public transport.

All of these require expert analysis, detailed marketing and financial plans, and a skilled labor force to implement them at the local level. The goal is to reach a 50:50 ratio between car traffic and more eco-friendly modes of transportation such as car pooling, cycling, walking, and public transit.

Urban Planning

When it comes to urban development, Ottawa has underwent considerable transformations in light of the fact that light rail transit is about to begin operation for visitors and residents. Light rail transit is expected to change the cityscape. Major redevelopments are also underway, including the shopping centers at Westgate and Lincoln Fields, Tunney’s Pasture, Oblate lands on Main Street, the Forces Base Rockcliffe, and LeBreton Flats, to name a few. This is good news for residents as quality of life is of particular importance. The reason is that residents retire earlier and often have better government pensions. They also have plenty of time to have fun and spend. This is why quality of life matters.

The cityscape is changing and evolving, partly explained by population growth. In fact, by 2019, Ottawa’s population is expected to hit 1 million. The city grows at a faster pace than the rest of Canada and as we all know, it is citizens who transform the cityscape, especially young people who come to live and work in Ottawa. Light rail transit is expected to play an important role in light of population growth. When completed, about 70 percent of residents will be able to reach a station within 5 km. Moreover, light rail transit will have a profound effect on major downtown streets in Ottawa. At present, there are some 1,500 buses running on Albert and Slater Street. This number will go down to close to zero at some parts of Albert Street and about 400 a day running on Slater Street. The number of buses on Wellington Street and Rideau Street is also expected to drop significantly.

Local Economy

The local economy is also expected to grow, mainly because of influx of people and population growth and the significant construction activity already underway. The expected growth for 2017 is 2.2 percent. The growth rate was higher only in 2010 (2.9 percent GDP growth). This is good news given the fact that economic growth slowed down to 0.5 percent a year because of federal layoffs in 2012, 2013, and 2014. In 2017, growth is fueled by non-residential construction such as major renovation and the light rail project. Tourists visiting the city also help revive the local economy. According to experts, visitors will grow by 125 – 150,000 this year, spending additional $50 million in Ottawa.