Salaries in Ottawa are turning the city into a veritably profitable real estate market for all involved.
“We’re seeing a lot of the tech companies hiring and, for the most part, their employees are above-average income earners, or they’re people with average incomes but who also have a lot of stock benefits, which means they have money for larger down payments,” said DLC Smart Debt mortgage broker Chris Allard. “There are so many tech companies in Ottawa right now and they’re all making it so that people have lager down payments because of how they’re structured at work.”
Tech isn’t the only game in town, as most Canadians know. The federal government is also one of Ottawa’s biggest employers and, unsurprisingly, the salaries are competitive. Allard noted that the average salary in Ottawa is in the neighbourhood of $70,000.
“The government seems to be offering more permanent jobs than contract work like they had been, and that’s a huge plus if you’re trying to put a down payment down on a home,” he said. “Most government employees are in the range of $50,000 to $120,000—which is a big range—but most of them are above-average income earners. If you’re a government worker, you qualify for more than the average person in Ottawa.”
Well-paying jobs aren’t the only things contributing to the city’s price run-up on real estate. According to John King, license partner of Engel & Völkers Ottawa Central, inventory in the city is extremely low. Unlike the inventory glut of a decade ago, builders seem careful not to overbuild and drive down the value of homes in the city.
“Ten years ago was a strong market and there were going to be a lot of new condo starts in Ottawa, but that negatively impacted the condo market,” said King. “When all the new condos started, we had a surplus and it drove prices down, and then all the developers that were going to build in Ottawa ran with their tail between their legs. They either sold lots to other builders or never got started.”
Ottawa’s inventory scarcity and strong employment prospects have conspired to drive prices skyward. King estimates that about 50% of his property listings sell either at asking or higher.
“I’ve had personal experience with seeing some of my listings sell to some of the tech executives who have been bidding significantly on the properties to secure them, and it’s driven prices higher,” he said. “Homes that used to sell for $25,000 over asking are now going for anywhere between $50,000 to $200,000 over asking. That happens with the young, deep-pocketed professionals. The tech industry here secures above-average income and there are also a lot of senior government people. Even the young lawyers working for justice departments can earn incomes well north of $100,000 a year. These people can all get into the market.”
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