How much does real estate cost in Canada's capital city

In 2020, we sold a house in Montreal, Quebec, and bought a new one in Ottawa, Ontario. Natalia Flom, a Canadian realtor, helped us look for a home in the capital, and brokered the deal at the height of the pandemic.

Watch the interview with her and find out:

✔️ the cost of renting apartments and homes in Ottawa
✔️ the cost of buying property in Canada's capital
✔️ conditions for getting a loan for Canadian real estate
✔️ mortgage interest rates
✔️ good neighbourhoods in Ottawa to live in
✔️ the cost of a Canadian realtor
✔️ how to become a real estate agent in Canada
and more!

(Alex) Natasha, hi!

(Natasha) Hi Alex, good to see you!

(A) I want to say a big thank you again from our whole family, I still can't believe that we are living in a dream house, thanks to you. I don't understand how such an offer came on the Canadian real estate market at all. And we were not overpaying hundreds of thousands of dollars, as is now customary.

(N) I'm actually very happy for your family. Congratulations again, for probably the hundredth time already!

(A) My Instagram subscribers sent in questions to ask you. By the way, guys, if you're not already subscribed to my Instagram, do so right now. When I invite heroes for interviews, you'll be able to ask them questions.

(N) Alex, thank you so much for the opportunity to answer these questions centrally, because I get questions all the time about living in Ottawa, too, and of course about real estate.

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(A) Before I ask questions about prices and what's best to buy, tell me a few words about yourself and how you became a Canadian Realtor, because that question was asked too.

(H) Before coming to Canada, I worked at a large bank as a mortgage specialist for over 15 years, which means that I have been involved with real estate practically since I graduated from university. During my work at the bank, I introduced and "matchmated" hundreds of deals between my clients — sellers and buyers who took out mortgages with us. After coming to Canada, I almost immediately bought a house for my family and started a real estate investment business.

(A) So you have more than one home you've already purchased?

(N) Well, of course not. Having been in Canada for less than a year, I decided to become a full-time realtor. To become a realtor in Canada, you have to obtain a provincial license. You have to attend a special college, become a member of a Realtor's association, take out professional insurance and get a job with a real estate agency. I work for RE/MAX Affiliates, which is the largest real estate firm in the world. The Realtor profession in Canal is very highly regulated and regulated, different rules and laws are coming out all the time, you need to be aware of all the changes all the time. In addition, you have to take an interest in what is going on in related fields — in general, realtors have no time to get bored.

(A) How long does it take to study to become a realtor?

(H) Learning then, many years ago, was about a year. You had to take a certain number of courses, some of which you could take online, and some of which you had to go to school for. It all looks very different now. I think that within a year or a year and a half you can definitely finish — probably closer to a year.

(A) How much is the money, roughly? Ten thousand, a thousand dollars, a hundred dollars?

(N) No, I think it was less than 10 thousand. At that time, it was somewhere around 6 thousand. The costs that start from the moment you start working are much higher than the costs of studying. To start working in this profession, you need to be financially prepared.

(A) But you have no regrets?

(N) That's not the word. It's my favourite job, my vocation, I enjoy it and I hope my clients are happy too.

(A) Let's imagine a situation where a family is still in their home country and they are thinking about buying a house right now. They have never been to Canada. Is it possible, will they get a loan, what kind of down payment is needed?

(H) It is possible to buy a property in permanent residence status without arriving in advance. You can also buy as a tourist, but you cannot get financing. Let's look at the most common case: a person already has permanent residence status, but has not yet arrived. He can get financing if he has a minimum of 35% prepayment. In addition, you must be sure to show the bank that there are funds to pay the annual property tax, annual mortgage payment and utilities, as well as 1.5% of the value of the house for closing costs. The bank will also conduct an income and expense verification in the country of residence.

(A) Have you had any experience of people buying property without seeing it?

(N) I have clients almost every week who don't see real estate. But mostly they are not from abroad, but from other provinces. That is, I rent an apartment on my phone, very detailed, looking at everything, so that there are no "surprises" in the house. I send all the files to the client, and we discuss what I have seen. The market is so dynamic now that if an object is put up for sale, it can be sold in an hour, not even the next day. Also, before any transaction, if one does not have 100% equity financing, one must go to a mortgage broker or a bank and get a written prior approval for a loan.

(A) Please tell me who the Canadian broker is, because my subscribers, who have never been to Canada, probably don't know.

(H) It's a mortgage specialist. They are federally licensed and work in almost every province. This is a specialist who will review the documents, forward them to the financial institution, and tell them under what conditions the loan can be obtained. There are such specialists who work in banks, and there are private ones.

(A) So you don't have to go to you right away — you have to get the loan amount approved first?

(N) Absolutely. Usually a person calls me, I listen to him carefully and tell him that before moving on to further steps, he has to bring me a document from a mortgage broker that says how much we can expect to pay.

(A) What is the average rate on a loan? I know that in Russia and Ukraine the rates are cosmic. Surprise people.

(N) We have low rates even for Canada right now. Depending on the type of loan, the purpose of the purchase (for yourself or for investment) — the average rate is between 1.4% and 2%.

(A) I got a home loan just a year ago, and I'm almost 3% down. Let's go back to the real estate options: the family has already moved to Canada, they are new arrivals with a permanent residence and are looking for work. Will they necessarily have to contribute 35%?

(H) If people already have a permanent residence but are not yet employed and can convince the bank that they will find a job soon, then the minimum contribution is 35%, and you will still need to show the bank that there are funds for all those expenses I mentioned earlier.

If a person has been in Canada for less than a year, in permanent residence status, and is already working, they can theoretically receive funding for up to 80% of the cost.

If a Permanent Resident has lived in Canada for more than a year, is employed, and their income-to-expenses ratio suits the bank, they can get a loan with 5% down payment.

If a person comes on a work visa, he too can buy property, but not immediately, and wait until at least the first salary. Also need to bring a reference from the bank of the previous country of residence, to show their income and expenses in Canada. Then you can get financing for up to 90% of the value of the house.

(A) Which is better to buy: an apartment or a house?

(N) That's a great question, but it's very difficult to answer it without talking to potential clients. What do they prefer, what is their lifestyle, where do they want to live — in the centre or outside the city, do they need a plot, and most importantly, what is their budget.

(A) How much are apartments, or condos, townhouses and houses, on average, worth in Ottawa as of early 2021? And tell me what townhouses are.

(N) Of course, it very much depends on the area, the house and so on. But very, very average: apartments from 300 thousand Canadian dollars. A townhouse is a house that is connected to other houses by one or two walls. They can be two or three stories, with or without a backyard, with or without a garage. The most starting price is from $500,000 CAD, but it can be $700,000 to $800,000. A detached one-garage home costs from 650 thousand, and a two-garage home from 750 thousand.

(A) Are you calling prices downtown or uptown now?

(H) Flats are closer to the centre or in the eastern, southern part of Ottawa, there are very few in the west. And the rest of the houses are 20-25 kilometres from the centre, in bedroom communities.

(A) When we were thinking about moving to Ottawa, we looked first at neighbourhoods with good schools, because you can only send your child to a school in your area. What areas would you advise to settle in, and which are better to avoid, where there are more Russian-speaking kids?

(N) Russian-speaking people live all over Ottawa, sometimes they can be found in completely unexpected places. It seems to me that it is better for a family with children to settle in residential areas that are not very far from the centre, where, on the one hand, it is quiet and, on the other hand, there is developed infrastructure, little social housing and a high socio-economic level of residents.

To take Kanata as an example, it's an area about 20 kilometers from downtown. It has a huge high-tech area, whose highly skilled workers settle mostly in Kanata and neighboring Stittsville.

(A) We live in Stittsville.

(N) And I live in Kanat. There's a very high level of schools here, lots of circles, sports centres, libraries. It's a very nice neighbourhood, lots of parks. Basically, any bedroom communities in Ottawa are green, nice and good to live in. On the east side of Ottawa, Orlins is about the same distance. There's a bit more of a French-speaking population there, but the area is also nice, very green, and has a lot of nice old streets. Another neighborhood with lots of old neighborhoods and new construction is Barrhaven, about the same distance from downtown. Kanata, Stittsville and Barrhaven are west Ottawa and Orlins is east.

There are very few areas in Ottawa where it is not recommended to settle at all. I would be wary of properties near social housing, alcohol or drug treatment centres, and I would also avoid places where there is a lot of cheap rental housing nearby. There aren't many places like that, they're all closer to the centre. But when a person who works downtown comes to me and wants to find something, we look carefully at the map — where's a night shelter, where's something like that, a marijuana shop. We look to make sure there isn't a subway entrance nearby. There is a lot to choose from in Ottawa.

(A) If guys are just starting out in Canada, they don't have money for their first home yet. How much does it cost to rent in the areas you named? An apartment, a townhouse and a detached house.

(H) Again, very much depends on the neighbourhood, the condition of the house, the size of the house, whether there is a garage or parking — a million factors. But generally speaking, a small condo starts at C$1,500, a townhouse at C$2,000, a detached two-garage home at C$2,300. People usually look for budget options. For a family with children, a townhouse is the best.

(A) How much harder is it to rent with animals?

(N) Significantly harder. Families with animals are less likely to rent new homes. But pets are not pets. Many people don't want to rent to families with large dogs who might scratch flooring with their claws or damage carpets. It may be easier for such people to rent an apartment because many condos allow pets, but there may be a weight limit, such as allowing an animal up to 45 pounds. Then, for example, a huge dog is not allowed, but a dachshund is. Some landlords do not take people with cats, because they are allergic. In general, it is harder to find accommodation with animals, but there are many complexes, even townhouses, which are owned by corporations, and they rent to tenants with animals.

(A) When we rented our first place, we were told that we couldn't have pets with us. I perfectly understand the owners, because when we moved into the new house, our Labrador chewed up the skirting boards. If you do renovations, it's going to cost space money. Let's talk about construction quality, because I watch new houses being built — practically out of paper. If you live in a condo, there can be very poor soundproofing. Neighbors often complain about each other.

(H) Well, in any new house the foundation is concrete after all. Audibility, of course, can be like in all apartments. There are some houses that are more audible, and some that are weaker. In luxury homes, the sound insulation is better. Very individual, I would say. In townhouses there is not very strong hearing, we ourselves, when we first arrived, rented a townhouse, and the only thing I could hear was when a child stomped hard, running up and down the stairs. In the winter, when everything is closed, you can't hear anything at all, but in the summer with the windows open, sure, you can. But it's not just in Canada, it's anywhere in the world.

(A) Back to the questions. Let me remind you that I am asking the questions that subscribers have asked. They are asking how much the prices will change in 2021, are there any forecasts? Well, the house we bought less than a year ago has already gone up in price by 100 thousand, I think even more. Is it possible to bargain down or is it necessary to pay more than the price for which the house is listed?

(H) Regarding bidding, it's very individual. Realtors have a very popular technique — putting a house for sale at a lower price, because there is a huge number of applicants for each house. For example, a townhouse worth 500,000 rubles is being offered for 400,000. Accordingly, people who are not very knowledgeable, or hoping for a miracle, make an offer that is close to the price for which the property is offered. Of course, they have no chance. The house eventually gets away, let's say for 550 thousand — that is, 150 thousand more expensive than the undervalued price and 50 thousand more expensive than the real one. The price you see in the ad has nothing to do with the real price.

Perhaps the only type of real estate today where you can play a little bit down, but not always, are apartments in the city centre. Because today most of the people who worked downtown work from home. A lot of investment housing is empty. Of course, prices haven't gone down. There is a small percentage of non-pricing, but only because everyone understands that this is temporary and that in a few months everything will go back to normal.

And the forecast for the coming year is for rapid growth, at least in Ottawa. Demand exceeds supply several times over. Ottawa is attracting a huge number of people from outside — itself, from abroad, but also from other provinces. People who work from home and live somewhere in Toronto decide to improve their living conditions and come to Ottawa because it is a big city with developed infrastructure, it is quiet and beautiful, and real estate here is much cheaper than in Toronto.

People who find high-tech and government jobs in Ottawa also come here. And, again, Ottawa residents are virtually unaffected financially by the pandemic because they work in the public sector and high tech. They're also trying to improve their housing conditions and buying investment property.

And when the borders open, there will be an influx of new immigrants as well as more people moving in from other provinces because there will be new jobs.

During the lockdown, approvals for new construction phases are frozen, only what has already been started is being built. There is an increase in demand, but there is no market saturation. Therefore, the trend is unambiguous growth, there are no prerequisites for a fall in prices in the capital.

(A) By the way, I got a letter today from the municipality, they announced that they're going to expand the city boundary, develop the area in the Kanata area and others coming up. Ottawa will be a bigger capital city, it's not that big of a city yet. Natasha, if my subscribers are interested in finding out about renting or buying a home, can they contact you?

(H) Of course, leave my contacts, have them write me on Facebook, email me or call me on the phone. I'm always happy to answer.

(A) One last question: how much do your services cost when renting or buying a property?

(H) When renting or buying, they cost nothing. In buying, the realtor's commission is paid by the seller. And renting is most often free, in the hope that the person will turn to us one day to buy or sell. Very often it happens that my clients have bought something on the investment, and the person turns to me to rent a place, and my client wants to rent. I just put them together and no one pays anyone. If it is a question of selling, then of course the commission is paid by the seller, but it's all individual.

(A) I think the main audience that will watch this video when they come to Canada will be looking for temporary housing. It turns out you can even show them an apartment or house online?

(N) Of course.

(A) When we bought the house, our transaction took place entirely online. I never once saw the sellers, our notary public. It's such an age now that everything is done online.

(H) Especially during lockdown. But professionals check everything, first the realtor, then the lawyer. You can feel protected.

(A) Natasha, thank you so much!

I recommend Natalia from the bottom of my heart, this is not a commercial, but my initiative to record the interview as a thank you. Natalia said that people have to put up 150 thousand to buy a property and we paid only 501 Canadian dollars on top. We still had additional conditions: the house had to be inspected by an inspector, the bank had to approve the financing... Now something crazy was going on.

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Wishing everyone to buy a house in Canada!

Contacts of Nataly Flom
other Russian-speaking real estate agents in major Canadian cities

Also see:

◼️ Review of our first home in Montreal
◼️ Review of the basement of our home in Ottawa
◼️ Examples of Canadian real estate ◼️ Moving to Ottawa
◼️ Reasons for moving to Ontario from Quebec

Alex Pavlenko, founder of Immigrant.Today, a Canadian immigration portal