Read the full Where to Buy Now feature in the Real Estate 2018 issue of Ottawa Magazine
Back in the late 1950s, the Canadian dream home was a big bungalow on a big suburban lot, preferably on a quiet cul-de-sac where the family’s 3.9 children could safely play road hockey and everyone could park their giant finned cars. The giant cars were key because people needed them to get to the mall, to school, to the dentist’s office, and just about anywhere else they wanted to go.
Several generations later, many of those 3.9 children — and their millennial offspring — have a different dream in mind. With rising gas prices and increasing traffic, parking isn’t the drawing card it once was. Long drives are becoming deal breakers.
And research shows those long drives aren’t good for you, either. According to an Ontario study published in the Journal of the American Medical Association in 2016, pedestrian-scaled neighbourhoods were associated with lower rates of obesity and decreased incidence of diabetes. (The authors added, however, that more research is needed to determine whether walkability was the reason residents of those areas were slimmer and healthier than other people.)
The Holy Grail of ’Hoods
Beyond physical health, there’s that hard-to-measure yearning for human connection that we know contributes to quality of life. Amazon, eBay, and Canada Post bring the world’s goods to our door. Many of our interactions with even our closest friends and relatives are mediated through screens. If we’re not careful, we can spend days indoors, staring at Instagram, never hearing a human voice.
Is it any wonder that vibrant, walkable neighbourhoods are the holy grail for many?
They’re so coveted, in fact, that the liveliest ones are out of reach for most home-buyers. Even a small place in the Glebe, Westboro, or New Edinburgh doesn’t come cheap (a pocket-sized one-bedroom condo at Bank Street and Third Avenue was listed recently at $429,000, which is roughly $88,000 higher than the latest median condo price for the city as a whole, according to statistics from Royal LePage). With new mortgage rules that will see some buyers turned down no matter what the size of their down payment, houses in popular areas are more out of reach than ever.
On January 1, 2018, new rules came into effect that will affect most people who are negotiating mortgages with a federally regulated lender. Now, anyone moving their mortgage to another bank or refinancing their home will be subject to a stress test to determine whether they can keep paying their mortgage if interest rates rise by two or more percentage points above the contracted rate.
Lenders and real estate agents believe the new rules make sense and will help keep homeowners from overextending themselves, says Hanna Browne, a broker with Royal LePage Team Realty.
The flip side is that buyers in 2018 will be able to afford a lot less than they could last year. “A family with an income of $100,000, before the new year, they would have been able to qualify for a home at $550,000, whereas now they can probably only purchase around $475,000,” says Browne, citing Ottawa Real Estate Board (OREB) statistics. As a result, houses in expensive, popular areas will be more out of reach than ever.
What is an Emerging ’Hood?
But here’s the good news: if you dream of living in a neighbourhood where you can meet friends in a pub, browse in a farmers’ market, or actually talk to your neighbours instead of just waving at them through your windshield, you don’t necessarily have to be house-poor. (After all, as Browne points out, OREB statistics suggest almost 10,000 of the 13,500 houses sold in the city in 2017 went for under $500,000.) You just have to think ahead and be patient. What you need is an emerging neighbourhood — one that doesn’t have quite all the bells and whistles yet but likely will soon.
So what puts a neighbourhood in the “emerging” category?
It’s an inexact science, and my past predictions haven’t always come true. However, a few factors usually play a role, including intensification, major infrastructure projects, and public transit improvements. New roads, bridges, transit stations, and water systems can make more intensive development possible, attracting more residents. That higher population density makes many amenities more feasible. In other words, if you build it, they (residents, shops, services, schools, doctors, craft breweries, organic bakeries, your hipster cousin) may come. The key word is may.
“It’s a bit of a chicken and egg with business because you have to have a certain level of population to be able to attract and keep businesses — but you know, people aren’t going to move in unless there are businesses,” notes Phyllis Odenbach Sutton, president of the Ottawa East Community Association.
One Word: Quebec
Often, those willing to take a chance on a neighbourhood in transition are flexible because they don’t have the budget to buy in the hottest areas. If that sounds like you, I have one word: Quebec. In the last quarter of 2017, the aggregate median price of a house in Gatineau was $265,759, or 60 per cent of the corresponding figure of $442,533 for Ottawa.
Of course, there are other factors to think about besides price when putting down roots in Quebec. English-language schools, university tuition fees, hydro rates, and car insurance prices, among other factors, might sway homeowners one way or another.
If you’re looking to get in on the ground floor of the Next Big Thing, here are four neighbourhoods to consider — two in Ottawa and two in the Outaouais.