This condo development on Bank and McLeod streets is helping the downtown Ottawa real estate market stay strong.
Housing re-sales across Ottawa fell in September for a second consecutive month, but Centretown remained insulated from these trends, according to figures compiled by the Ottawa Real Estate Board.
Centretown appears immune to a downturn in the Ottawa real estate market, which also dipped by 14 per cent in August compared with the same period in 2011, and then dropping by 17 per cent last month compared with September 2011.
But re-sales were steady in Centretown, with figures matching or beating August and September 2011.
High demand in downtown neighbourhoods is fueled by older buyers who want to be close to services such as hospitals, says Sandra Perez Torres, a senior market analyst with the Canada Mortgage and Housing Corp.
“A lot of of baby boomers, a lot of empty-nesters, they’re selling the bigger properties, and they’re moving closer to the downtown, where they can have easier access to hospitals, doctors, clinics and whatnot,” says Perez Torres, adding that young white-collar workers also gravitate towards urban centres.
“It’s mainly young professionals that want to be closer . . . to restaurants, where the action is, in the downtown,” she says.
New housing in these downtown areas tends to take the shape of high-rise buildings such as the condo towers rapidly appearing on the Ottawa skyline, she says. Since high demand makes land prices spike, developers tend to build vertically.
But high prices are causing some young professionals to think twice about investing in Centretown real estate.
“If you do the math, it makes more sense to rent than to buy at this point, because you don’t have to pay the condo fees or the property taxes, or all those extras,” says Camille Lem, after viewing a rental property in Centretown with her husband, a doctor in the biotech industry, and their young son.
“Even the rental prices have gone up significantly since three years ago,” she says, adding that as renters, she and her husband can more easily move to pursue business opportunities elsewhere.
The average price of housing units sold in Centretown this year (up to the end of September) was more than $400,000, while the average Ottawa-wide price was just over $353,000, according to figures from the Ottawa Real Estate Board.
Real estate broker Robert Hof says Ottawa is a good bet for investors due to factors such as “cash for life” among residents with government jobs and high disposable incomes causing the market to remain stable.
He downplays the recent downturn in sales across Ottawa, noting that the overall figure for units sold was up by nearly one per cent at the end of September compared with the same period last year.
“People have to differentiate the situation between Ottawa and the rest of the country,” Hof says.
"We’ve never had these large swings, these up and down cycles that the rest of the country has.”
Ansel Clarke, president of the Ottawa Real Estate Board, says ongoing fears of layoffs among federal civil servants may be contributing to the recent slump Ottawa-wide.
“I think people still are jittery,” Clarke says. “Everybody is taking a wait-and-see attitude.”