Q+A with Irina Popova, co-owner of Blue Panda Realty

Irina Popova is a real estate agent and the broker of record of Blue Panda Realty and has been specializing in the central Ottawa market since 2013. Recently, Irina shared her insights with New Home + Condo Guide

New Home + Condo Guide: PwC recently released a report naming Ottawa as one of the hot real estate markets to watch in 2020. What makes Ottawa such a coveted market?

Irina Popova: The housing market in the Ottawa area has experienced vibrant growth in the last several years owing to a number of factors. On the demand side, robust population growth, paired with strong economic growth has driven housing demand through 2018 and 2019. On the supply-side, development has struggled to keep pace with current demand. With the federal government being Canada’s largest employer and 40 per cent of all its employees living in the National Capital region, there is an overall sense of security that many other major cities may not experience.

Despite this year being more of a seller’s market, Ottawa is still an affordable city. According to a recent RBC Housing Affordability Report, the percentage of household income needed to cover housing costs in Ottawa is 41 per cent. This share is below the national average of 51 per cent and well below the 82 per cent in Vancouver and 66 per cent in Toronto. The addition of an LRT system, Lansdowne redevelopment, the future Zibi and Lebreton Flats communities are just some of the highlights.

NHCG: What are the three most important things a person should consider before they look for a newly constructed home?

IP: 1. Timing

Ideal move-in date. In many cases, the occupancy date estimated by the developer will be delayed. What’s your back-up plan? If you need to sell your current property, will the timing be right?

If you’re considering a purchase in a newly launched project, a delay is even more likely. Most developers need to reach 60 per cent sales before they can get financing to even start the build. If the building is already being constructed, the delays are still possible but less likely to occur.

2. Reputation of the builder

The consumer must put a lot of trust in the developer. Renderings and floorplans don’t always tell the full story and are sometimes not a realistic representation of the final product. The best way to ensure that you will be satisfied with the quality of the construction and the entire buying process is to research the developer’s past projects.

Were they completed on time? Is this developer accommodating when it comes to addressing deficiencies? Are the finishes and quality as advertised?
Bottom line: do your homework.

3. Additional expenses

In most cases, closings costs are higher when buying a brand-new property than a resale home and can add up to thousands of dollars.
While homebuyers are able to put down five per cent on their first purchase, most developers require a 15 -20 per cent deposit on all pre-construction sales. Occasionally though, developers do offer deposit promotions for first-time homebuyers, usually when the building is nearing completion.

For investor buyers, it’s also important to note that HST is not included in the sale price and will need to be paid on the day of closing. While it’s possible to eventually get that refunded, this is a big cost to consider and I recommend seeking an accountant’s advice.

NHCG: What should a first-time homebuyer know about getting a mortgage, budgeting and any hidden expenses that may crop up?

IP: The first step in a first-time homebuyer’s journey should be to find a reliable mortgage broker for a pre-approval - this will help establish a comfortable budget based on your credit score, income, down payment amount and financial goals.
Closing costs are around 1.5 to two per cent of the purchase price. Those costs consist of lawyer fees, home inspection, closing adjustments (refund to seller of pre-paid property taxes, condo fees, utilities), land transfer tax (first-time homebuyers receive a rebate of up to $4,000), title insurance, CMHC insurance (if the down payment is below 20 per cent), and moving costs.

Unexpected surprises could arise. Make sure the development charges are capped in your purchase agreement, and that
you know exactly what’s included in your purchase price in terms of upgrades. While most experienced developers include all applicable taxes in the purchase price for end-users, I suggest triple-checking this. Developers have charged additional taxes on parking spots, storage lockers and upgrades. Hiring a lawyer who is comfortable with pre-construction contracts is very important.

NHCG: Are there advantages to purchasing a newly constructed home?

IP: Knowing that you are the first owner of a home is a great feeling. The biggest advantage of buying pre-construction though is the ability to choose the look and design of the space. While some developers will only allow you to choose the finishes, others will give you the freedom to make changes to the actual layout.
Another huge bonus is the Tarion Warranty. Tarion is a non-profit organization established to protect the rights of new-home buyers and regulate new-home builders.

NHCG: What kind of buyer should consider a new condo?

IP: Most condo buyers are either first-time homebuyers, down-sizers or investors.

First-time homebuyers come into homeownership after renting in a central location. Purchasing a condo allows them to keep their existing lifestyle. Freehold homes in central locations are becoming very pricey and out of reach for young buyers. Condo-living is also a huge time saver! No lawn maintenance, snow removal, or handy work required.

Many down-sizers turn to condos because of the freedom this lifestyle offers. Being able to lock the door and travel for a month without a worry is huge.
For investors, all of the above applies as well. Condos are an attractive rental opportunity.

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