First-time homebuyers going deeper into suburbs for affordability: CMHC

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Published on November 15, 2011

Published on November 14, 2011

OBJ Staff

Ottawa Business Journal

Condos may be king in the central areas of Ottawa's new housing market, but first-time homebuyers are going further and further outside the Greenbelt in search of affordable single-detached residences, according to a local expert.

The average price of a downtown home reached $484,000 in 2011, according to data presented last week by the Canada Mortgage and Housing Corp. By contrast, prices averaged $336,000 in Orleans and $340,000 in Kanata.

"Because of these prices and ... first-time home buyers, housing farther from the core is growing," said Sandra Perez-Torres, a senior market analyst at CMHC, at the Crown corporation's annual housing outlook late last week.

Four out of every five new homes are being constructed outside the Greenbelt, where the majority of low-density homes are constructed.

While demand for higher-density homes is expected to increase, Ms. Perez-Torres says buyers are increasingly searching for affordable housing options.

CMHC forecasts single-detached housing starts to decrease 7.5 per cent to 1,850 homes in 2012. Apartment-style residences are expected to increase 1.7 per cent to 1,500 starts.

Ms. Perez-Torres said empty-nesters are driving the market as they downsize, moving out of larger homes and into condos.

By 2016, the CMHC projects over 12,000 potential condo buyers between the ages of 65 and 74 in the local market.

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Doug: - November 17, 2011 at 20:15:27

This shouldn't be a great surprise to anyone familiar with Canadian demographic and employment trends. The number of families with young children is again on the rise, they can't afford expensive inner city homes, and many of the jobs are no longer in the central city - even in Ottawa. The live-work-play design of new neighbourhoods is starting to make the 'bedroom suburb' and big commute a thing of the past.

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Larry: - November 16, 2011 at 09:16:08

Here's another issue. The new schools for young families are being built outside the core (because new families are moving there). Only old broken down schools are left in the core. Why would young families stay in the core, when all the old schools (no air conditioning, small gyms) are crumbling?

Kevin: - November 15, 2011 at 09:25:19

I wonder if the only thing that the purchasers are looking at is the price of the house, and not considering the costs that are higher living outside of the core. For instance, depending on where you live there is little or no bus service; this can drive up transportation costs as a result of higher fuel costs, higher maintenance costs on vehicles and insurance. It can drive up a portion of your home insurance costs as a result of living further from a fire station. If you don't have town water and sewer, have they factored in the costs of maintaining a private well and septic system, including water softening, iron filtering and potentially the removal of sulpher from potable water? Repairs to the weeping tile bed if it gets damaged (for instance, someone drives a backhoe over it... this happened to my neighbour). The electrical costs of running the pump(s) for the well. While housing may be less expensive in Munster or Blackburn, or even further out, other costs increase.