If you are looking to buy your first home in Ontario but do not quite know what city to put your money towards, the two strongest centres in the province are Ottawa and Toronto. While an argument can be made for either city, first-time home buyers must consider a number of things prior to making any firm commitment.
1. Toronto or Ottawa – The Current State of the Real Estate Market
The Ottawa real estate market is among the healthiest in the country, seeing properties move fast with an average eighty-two days on market prior to sale. As inventory levels continue to decrease as is the case in Toronto and other Canadian cities, this has increased the value of properties with an annual growth rate on residential properties of 5.3 percent. The average selling price for an Ottawa residential home in March, 2017 was $415,467 and the average selling price for an Ottawa condo that same month is $272,597.
The Toronto real estate market is in a state of uncertainty currently as recent government laws have threatened the growth rate currently being experienced. It is unclear what the long-term effect that new provincial guidelines will have on the city. Price growth in Toronto is among the highest in Canada, seeing an annual growth rate of approximately 29 percent. As an investment, it is unclear how long the city will be able to sustain its current growth and what an effective long-term real estate strategy might be.
2. Getting to Know the Neighborhoods
If you are buying your first home in Ottawa or Toronto, know that though growth is experienced city-wide, getting to know the different neighborhoods reveals a kind of unevenness across these regions. Some of the top Toronto neighborhoods to buy in include South Riverdale and Aurora Heights, among others. If you are looking for something deeply embedded into the city core, Toronto regions such as King West are ideal however come with a hefty price tag. More suburban regions of Toronto can range from healthy middle class neighborhoods to struggling low income developments.
As an alternative, Ottawa provides much of the same advantages as Toronto but with a little more stability. As a first-time buyer, it’s key to remember that it’s all in what the end goal is. If you are looking to buy to sell, an area like Kanata Lakes may prove to be ideal, one of the best regions in Ottawa to buy a family home. If you are seekingsomething where there is more commercial or residential development happening, anything in Alta Vista, Westboro, or Greely might do. Meanwhile, Rockcliffe Park and Old Ottawa South are both expensive and exclusive neighborhoods, providing luxuries that cannot necessarily be found in other parts of the city.
3. What is the City Known for
Consider the identity of the city. Toronto is Canada’s corporate headquarters, where the Maple Leafs and the Blue Jays are centred, and is the country’s most multi-cultural city. Ottawa is Canada’s government hub, embracing and protecting its heritage while promoting smart development, is the home of the Ottawa Senators of the NHL, and is becoming widely known as home for several Canadian-based industries including the country’s tech sector.
4. How Healthy is the City’s House Market
As evidenced, both Toronto and Ottawa demonstrate two healthy real estate markets. As it relates to housing specifically, it is unclear how new provincial standards are going to impact the Toronto housing market. The city’s housing market is experiencing more growth than its condos however the influx of population has meant a diminished rate of sale comparatively speaking. Market conditions continue to tighten in Toronto due to this and it is unclear if it can sustain its growth. For the time being however, its housing market is sizzling.
The City of Ottawa’s housing market continues to steadily gain momentum as average price and growth has seen increases on a monthly basis. Though in past years, the Ottawa housing market has lagged in growth, these past two years has seen sales continue to rise, leading to bidding wars and sellers seeing the benefits. The advantages of Ottawa over Toronto are that Ottawa’s growth has shown itself to be much more sustainable and in turn, more affordable than Toronto, which is particularly advantageous to first-time buyers searching for their first home.
5. How Healthy is the Condo Market
Toronto’s condo market continues to grow beyond even the wildest of expectations, making it difficult for buyers. If you are a first-time buyer looking at the condo market in Toronto, expect to pay significantly higher than asking price and potentially having to settle for less than what you wanted.
In contrast, Ottawa’s condo market is seeing lower inventory levels but can provide more luxuries and is overall more affordable than what is available in Toronto. More than half of Ottawa’s condo sales are coming from units priced between $150,000 and $249,999, which alone shows the difference between Ottawa and Toronto, where units regularly fetch $450,000 and above. The buy-in for Ottawa is far lower and yet the growth rate is safe, stable, and similar to what would be found in Toronto.
If you are a first-time buyer, buying a home is one of the biggest purchases that you can make. Buying in Ottawa allows Canadians to take advantages of a lower buy-in while still being in a city hub of development.