Ottawa boasts highest five-year return for home ownership: survey.
June 22, 2004 - It's no secret that the price of a home in Ottawa has shot through the roof in the past five years and a new report from one of Canada's large real estate firms finds that the nation's capital ranks far above most cities when it comes to return on investment.
The survey compared the rates of return for homeowners in 20 major cities who bought five and 10 years ago.
In terms of straight percentage increase between the purchase price of a home five years ago and its resale value now, Ottawa ranked first with a return of 103 per cent.
Peterborough ranked second at 98 per cent and St. John's placed third at 92 per cent.
Elsewhere in Ontario, Toronto reported a 62-per-cent return, on average, over five years. In the Kingston area the return was 63 per cent, in London St. Thomas the return was 58 per cent. Windsor Essex reported the smallest return among the 20 cities surveyed at 46 per cent.
The highest return over the ten-year period ending this year was found out east in Halifax-Dartmouth, at 146 per cent. Second place over the last 10 years was Peterborough at 143 per cent. Regina and Saskatoon tied for third with 137 per cent.
Ottawa came fourth with a still robust 130 per cent over 10 years. Toronto, by comparison, logged a return of 104 per cent.
The figures do not take into consideration other factors such as taxes and costs of upkeep. The firm's president said they tried to keep the variables to a minimum.
"Obviously, there are other costs to home ownership – taxes and upkeep, for example – just as there are lifestyle benefits and economic bonuses, like the tax protection of your capital gain. For purposes of the survey, though, we tried to stick to variables that were consistent and comparable among housing markets," the firm's president said in the report.
"It shows that the big profits are still available in the big markets, especially if you can afford to invest without going too deeply in debt," he added. "But the bottom line is that buying your own home in virtually any community in Canada is still an excellent way to build equity."
Looking at a different metric, the firm compared the rates of return on what it deemed to be the "average" downpayment of $20,000.
Ottawa led the pack with a five-year rate of return of 512 per cent and a 10-year rate of 287 per cent. Peterborough came second with rates of return of 357 per cent and 431 per cent, respectively.
© Copyright 2004 The Ottawa Business Journal