Just cross the Ottawa River and buy a home in Quebec if you want to save a bundle in living costs – that's the conventional wisdom, at least.
Claridge Homes' Claridge Plaza development, on Rideau Street. (photo courtesy mattrichling.com)
The good news is there appears to be some truth in it. But don’t expect to save a lot of money if you're looking to buy a new condo in or close to downtown.
There's a wide variation in prices of condos currently under construction or planned for the near future in both Ottawa and Gatineau. But these variations appear to be largely due to factors unrelated to the city in which the property is located.
You get what you pay for – that’s the axiom. And it’s true, up to a point. Supply and demand determines how much profit a builder makes on a luxury condo, just as with any other commodity.
As for costs, these are very similar on either side of the Ottawa River. Costs of materials and labour are about the same. Land is cheaper in Gatineau than in Ottawa, but that influences house prices far more than apartment prices.
In a 20-storey apartment building, for example, several owners share the cost of the same piece of land.
Supply and demand helps explain why Claridge Homes, a leading builder of luxury condos in downtown Ottawa, charges more for apartments in its new high-rise towers on Rideau Street than in its pioneering condo development on the former wasteland of LeBreton Flats, which is equally close to Parliament Hill.
Neil Malhotra, Claridge Homes vice-president, points out that the Claridge Plaza development on Rideau Street is close to the Byward Market, with all the attractions it offers, whereas Claridge’s New Urban Village on LeBreton Flats is in a new development.
Of course, costs of the two projects may vary, too, but that's of little concern of buyers.
Take as an example the purchase price of a two-bedroom, fourth-floor apartment in the two Claridge projects. Such an apartment is listed for $319,000 in the LeBreton Flats development, and for $376,000 at Claridge Plaza on Rideau Street.
Each apartment has about 940 square feet of living space. The one on LeBreton Flats is about $342 per square foot, and the one on Rideau Street $400 per square foot.
For customers, comparing prices per square foot makes sense, especially for anyone looking to buy a new condo. That's because builders of condos are designing their units smaller and smaller, to keep rising purchase prices in check and to maximize profits.
In Gatineau, a luxurious high-rise apartment building is nearing completion at 224 Alexandre Tache Boul., close to downtown and with views of the Ottawa River and Parliament from many apartments. The building will be known as Park Place.
A two-bedroom, fourth-floor apartment at Park Place lists for $339,900. That’s about $20,000 more than the two-bedroom apartment on LeBreton Flats mentioned above. But the Park Place apartment has more space. It measures 1,187 square feet. That makes the price-per-square-foot $286, compared with $342 for the Claridge condo on LeBreton Flats and $400 for the one on Rideau Street.
Claridge Plaza’s prices per square foot are similar to those of Richcraft’s The Galleria, a luxury condo development on Besserer Street, also steps from Ottawa’s Byward Market. The Galleria includes a two-bedroom, fourth-floor apartment for $344,000. It measures 786 square feet, which makes the cost $438 per square foot.
Among the lowest-priced luxury condo apartments now under construction in Gatineau are those at Place Champlain, close to the Champlain Bridge and overlooking the Ottawa River. Three buildings are already occupied and a fourth and last building is now going up. Of course, this development is not in downtown Gatineau, but it’s close.
A two-bedroom, second-floor apartment at Place Champlain, with 1,178 square feet of living space, lists for $233,900. That’s $199 per square foot.
In any comparison of condo prices, would-be buyers must take into account quality, extras, shared amenities such as a swimming pool, parking, condo fees, property taxes – and, of course, location. And, in comparison with Quebec, there are differences in income tax, daycare and health care to consider.
A new luxury high-rise condo is also planned for downtown Gatineau. It is to be named the Cartier-Wellington. As Ottawa Business Journal reported earlier this year, the builders of the Cartier-Wellington are stressing the fact buyers will get a 75-per-cent reduction in property taxes for the first 10 years.
The tax cut is an effort by the City of Gatineau to encourage development in the downtown core of the former city of Hull.
The Cartier-Wellington has not yet released a price list but Patrick Chauvet, speaking for the builders, said a two-bedroom, sixth-floor apartment with 1,000 square feet of living space will sell for about $325,000, plus parking and taxes. That would make the price per square foot more than $350.
Mr. Chauvet said: "We believe that we are about $100 per square foot less expensive than on the Ottawa side for the same quality of apartments and inclusions. The reason for this is partly due to the boom in market pricing that has occurred in Ottawa, but which has not hit in Gatineau."
Claridge’s Mr. Malhotra said the City of Ottawa should do more to encourage downtown residential development, adding that development charges now add almost $10,000 to the cost of a new apartment in downtown Ottawa.