Canada’s top cities to buy real estate in

You’ll never believe which West-coast city cracked the top 5

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by

From the April 2016 issue of the magazine.

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Best deals in real estate 2016

A waterfront view in No.1-ranked city, Thunder Bay, Ont. (Vintage Architecture / Flickr)

Yes, Thunder Bay

In the last five years, real estate prices in this Northern Ontario city of just over 100,000 have appreciated faster than in any other city in Canada. While it may seem a stretch for a family to pick up and move to Thunder Bay, just because it ranks No. 1, investors looking for an income property certainly might be curious.

This year, when we ran the numbers, we weren’t surprised by Thunder Bay’s top billing. Once an integral stop on the nation’s train and truck routes, Canada’s Gateway to the West has been methodically rebuilding itself as a knowledge economy centre, attracting jobs in the medical, educational and government sectors. As such, the city’s job market is sheltered somewhat from price drops that have plagued manufacturing and resource sectors across Canada. The largest employers are the Regional Health Sciences Centre, Lakehead District School Board and Lakehead University, followed closely behind by the City of Thunder Bay and the Government of Ontario.

By and large, residents have remarkable buying power. The average household income is a reasonable $81,000. Yet home prices in the city remain exceptionally affordable: The average 2015 home cost just under $216,000, a little over two and a half times the average household income. Compare that to Toronto where homes are six times the average household income and Vancouver where they are nine times.

Photo gallery: Canada’s top 35 cities to buy real estate in »


      Play: Mark Brown talks the best places to buy with 680 News’ Mike Eppel


Thunder Bay homes also offer great income potential. How do we know? Rental rates in the city have risen 22% in the last five years, in part due to the persistent influx of post-secondary students who come to study at the Northern Ontario School of Medicine. By looking at the rent-to-mortgage ratio, we can see that an average monthly rent cheque would more than cover a mortgage payment. By comparison, average monthly rental rates cover about a third of the average monthly mortgage payment in Vancouver.

Our list did contain some surprises. For instance, the top four cities are in Ontario, a province that was hit hard in the last five years by a shrinking manufacturing sector, a lower loonie and tanking oil prices.

The economic fall-out was certainly felt in Toronto, which dropped three spots in our ranking to 15th overall. And yet Hamilton, Brantford and Guelph climbed by as many as five spots since last year. All three cities have high average household incomes in common—ranging from $78,000 to just over $95,000—while unemployment ranges from 4% to 5.7%, significantly lower than the current national average of 7.2%. At $443,000, Hamilton’s average home price is the highest of the bunch, but the city also boasts the highest compound annual rate of return for a five-year period at 7.3%.

The real shocker was Vancouver’s arrival in the top five, rising from 18th place last year. Truth be told, that had little to do with the value of its real estate. (The city came dead last in that category.) Vancouver shot up the ranking due, in part, to how hard other cities were hit by crashing oil prices and because its economic fundamentals are strong. Really strong. The projected GDP for the province is 3.14%, the best in the country, while the city’s unemployment rate is 5.9%. Despite a limited outlook for future appreciation, prospects going forward look good for this West Coast city.

Full rankings


Rank Rank City City Average home price (2015) Average home price (2015) Average home price ratio to average rent (Price to rent ratio) Average income to home price Average income to home price Home sales to new listings 1-year price appreciation 5-year price appreciation 5-year price appreciation 10-year price appreciation Average 5-year rent increase Average 5-year rent increase Rental vacancy Discretionary income levels Average GDP growth 2010 to 2014 (%) Projected GDP growth for 2015/2016 (%) Current unemployment rate (2015) (%) Previous year’s unemployment rate (2014) (%)
1 1 Thunder Bay (Ont.) Thunder Bay (Ont.) $215,922 $215,922 1.06 2.7 2.7 65.2 3.5% 8.4% 8.4% 5.9% 22.5% 22.5% 4.4% $41,322 1.9% 2.5% 5.2% 5.2%
2 2 Hamilton (Ont.) Hamilton (Ont.) $442,493 $442,493 0.57 4.9 4.9 77.0 9.1% 7.3% 7.3% 6.8% 18.1% 18.1% 3.4% $43,258 1.9% 2.5% 5.5% 5.8%
3 3 Brantford (Ont.) Brantford (Ont.) $293,059 $293,059 0.80 3.7 3.7 78.9 6.3% 5.0% 5.0% 4.9% 13.0% 13.0% 2.3% $39,198 1.9% 2.5% 5.7% 6.8%
4 4 Guelph (Ont.) Guelph (Ont.) $378,573 $378,573 0.70 4.0 4.0 69.9 5.9% 5.1% 5.1% 5.2% 14.1% 14.1% 1.1% $43,689 1.9% 2.5% 4.0% 6.2%
5 5 Vancouver (B.C.) Vancouver (B.C.) $902,801 $902,801 0.34 9.8 9.8 73.3 11.4% 6.0% 6.0% 7.8% 14.9% 14.9% 0.8% $38,280 2.4% 3.2% 5.9% 5.8%
6 6 Regina (Sask.) Regina (Sask.) $310,609 $310,609 0.87 3.1 3.1 43.9 -1.2% 3.8% 3.8% 9.7% 24.5% 24.5% 5.3% $48,777 3.1% 2.1% 4.4% 3.7%
7 7 Winnipeg (Man.) Winnipeg (Man.) $278,270 $278,270 0.87 3.3 3.3 55.3 1.3% 4.0% 4.0% 7.3% 26.3% 26.3% 2.9% $39,451 2.1% 2.4% 6.0% 5.8%
8 8 Barrie (Ont.) Barrie (Ont.) $373,203 $373,203 0.80 4.1 4.1 65.0 10.2% 5.8% 5.8% 4.9% 20.0% 20.0% 1.9% $43,192 1.9% 2.5% 7.0% 6.0%
9 9 Durham/Oshawa Durham/Oshawa $439,842 $439,842 0.61 4.3 4.3 75.4 13.5% 8.0% 8.0% 5.7% 14.6% 14.6% 1.7% $45,850 1.9% 2.5% 7.5% 7.1%
10 10 Edmonton (Alta.) Edmonton (Alta.) $369,536 $369,536 0.83 3.3 3.3 50.5 2.0% 2.4% 2.4% 6.7% 23.2% 23.2% 4.3% $54,531 3.5% 1.9% 6.0% 5.1%
11 11 Abbotsford – Mission (B.C.) Abbotsford – Mission (B.C.) $577,507 $577,507 0.37 6.9 6.9 72.0 12.0% 5.1% 5.1% 5.9% 9.1% 9.1% 0.8% $38,494 2.4% 3.2% 6.4% 7.4%
12 12 Kitchener – Cambridge – Waterloo (Ont.) Kitchener – Cambridge – Waterloo (Ont.) $348,269 $348,269 0.72 3.9 3.9 61.0 3.3% 3.7% 3.7% 4.7% 14.2% 14.2% 2.5% $43,252 1.9% 2.5% 5.9% 6.4%
13 13 St. Catharines – Niagara (Ont.) St. Catharines – Niagara (Ont.) $294,152 $294,152 0.77 3.9 3.9 70.0 7.8% 4.4% 4.4% 4.1% 11.5% 11.5% 2.8% $37,947 1.9% 2.5% 7.0% 7.7%
14 14 London (Ont.) London (Ont.) $265,370 $265,370 0.88 3.2 3.2 56.4 4.1% 3.1% 3.1% 4.0% 10.7% 10.7% 2.9% $41,065 1.9% 2.5% 6.5% 7.5%
15 15 Toronto (Ont.) Toronto (Ont.) $622,046 $622,046 0.51 6.1 6.1 63.1 5.9% 7.6% 7.6% 6.3% 15.3% 15.3% 1.6% $45,850 1.9% 2.5% 7.0% 8.0%
16 16 Windsor (Ont.) Windsor (Ont.) $196,664 $196,664 1.00 2.6 2.6 67.8 5.0% 4.3% 4.3% 1.9% 10.2% 10.2% 3.8% $38,387 1.9% 2.5% 9.8% 9.0%
17 17 Calgary (Alta.) Calgary (Alta.) $453,814 $453,814 0.71 3.5 3.5 56.2 -1.3% 2.6% 2.6% 6.1% 24.4% 24.4% 5.1% $61,169 3.5% 1.9% 6.4% 5.0%
18 18 Saskatoon (Sask.) Saskatoon (Sask.) $342,727 $342,727 0.78 3.4 3.4 37.7 0.6% 3.0% 3.0% 9.0% 17.0% 17.0% 6.3% $47,112 3.1% 2.1% 5.8% 4.1%
19 19 Kingston (Ont.) Kingston (Ont.) $293,375 $293,375 0.93 3.4 3.4 37.5 3.9% 3.3% 3.3% 4.1% 16.6% 16.6% 2.8% $43,540 1.9% 2.5% 6.6% 6.8%
20 20 Québec (Que.) Québec (Que.) $275,347 $275,347 0.73 3.6 3.6 52.5 4.4% 2.3% 2.3% 5.7% 12.7% 12.7% 4.0% $33,832 1.4% 1.7% 4.7% 5.3%
21 21 Greater Sudbury (Ont.) Greater Sudbury (Ont.) $242,303 $242,303 0.98 2.6 2.6 48.2 -3.0% 1.8% 1.8% 6.1% 14.1% 14.1% 3.5% $47,348 1.9% 2.5% 7.3% 6.4%
22 22 Victoria (B.C.) Victoria (B.C.) $521,616 $521,616 0.48 6.1 6.1 66.6 5.3% 0.7% 0.7% 3.2% 8.8% 8.8% 0.7% $38,419 2.4% 3.2% 5.8% 5.4%
23 23 Kelowna (B.C.) Kelowna (B.C.) $408,394 $408,394 0.59 4.8 4.8 60.2 2.5% 0.7% 0.7% 4.2% 9.4% 9.4% 0.7% $37,809 2.4% 3.2% 5.6% 4.6%
24 24 Peterborough (Ont.) Peterborough (Ont.) $297,847 $297,847 0.82 3.7 3.7 62.4 6.5% 3.6% 3.6% 3.7% 9.3% 9.3% 3.6% $39,641 1.9% 2.5% 7.7% 8.2%
25 25 Halifax (N.S.) Halifax (N.S.) $282,679 $282,679 0.91 3.5 3.5 46.4 2.1% 2.4% 2.4% 4.2% 17.0% 17.0% 3.4% $38,587 0.3% 1.2% 6.3% 6.1%
26 26 Ottawa (Ont.) Ottawa (Ont.) $369,477 $369,477 0.77 3.4 3.4 46.3 1.8% 2.4% 2.4% 4.1% 11.0% 11.0% 3.5% $52,955 1.9% 2.5% 6.3% 6.6%
27 27 St. John’s (Nfld.) St. John’s (Nfld.) $275,579 $275,579 0.82 3.1 3.1 39.1 -3.3% 3.2% 3.2% 6.9% 24.7% 24.7% 4.7% $39,734 1.0% 0.8% 6.5% 6.0%
28 28 Trois-Rivières (Que.) Trois-Rivières (Que.) $160,311 $160,311 0.91 2.5 2.5 58.1 -2.2% 1.4% 1.4% 3.5% 7.6% 7.6% 6.0% $28,771 1.4% 1.7% 6.6% 7.3%
29 29 Sherbrooke (Que.) Sherbrooke (Que.) $253,914 $253,914 0.62 3.9 3.9 47.2 13.2% 3.9% 3.9% 4.3% 7.6% 7.6% 5.8% $28,307 1.4% 1.7% 6.8% 7.2%
30 30 Charlottetown (P.E.I.) Charlottetown (P.E.I.) $163,533 $163,533 1.30 2.2 2.2 45.2 0.4% 2.1% 2.1% 3.4% 15.7% 15.7% 4.0% $37,552 1.1% 0.8% 9.5% 9.5%
31 31 Moncton (N.B.) Moncton (N.B.) $163,601 $163,601 1.18 2.3 2.3 44.9 0.3% 1.4% 1.4% 2.8% 14.3% 14.3% 7.4% $35,298 0.1% 0.8% 6.9% 6.7%
32 32 Montréal (Que.) Montréal (Que.) $349,289 $349,289 0.56 4.7 4.7 54.2 6.4% 3.2% 3.2% 4.8% 9.4% 9.4% 4.0% $31,475 1.4% 1.7% 8.4% 8.2%
33 33 Gatineau (Que.) Gatineau (Que.) $250,441 $250,441 0.77 3.0 3.0 42.0 3.5% 2.2% 2.2% 4.0% 6.1% 6.1% 5.9% $36,478 1.4% 1.7% 7.1% 7.0%
34 34 Saguenay (Que.) Saguenay (Que.) $180,693 $180,693 0.83 2.6 2.6 45.1 -5.2% 1.5% 1.5% 5.5% 10.1% 10.1% 7.1% $32,005 1.4% 1.7% 7.8% 9.6%
35 35 Saint John (N.B.) Saint John (N.B.) $163,572 $163,572 1.11 2.2 2.2 39.1 -3.6% -0.9% -0.9% 3.2% 10.6% 10.6% 8.4% $37,431 0.1% 0.8% 8.2% 7.7%



SOURCES: Canada Mortgage and Housing Corporation; Canadian Real Estate Association; Environics Analytics: WealthScapes 2015; Statistics Canada

8 comments on “Canada’s top cities to buy real estate in

  1. You have to be out of your mind to put Vancouver @ 5. You just lost me as a paying subscriber. This has got to be THE WORST advice to give. Vancouver is at all time HIGHS! you want to buy when the market is insanely high, become indebted to a MASSIVE mortgage, and when the market comes back down to reality you and everyone else will be fucked. Just talk to some home owners in Calgary about how fast the market can change.

    I am disgusted by this article and suspect MONEYSENSE has been paid to give a false representation of the real estate market in Canada.

    Reply

    • En route to Thunder Bay from S. Ontario, drop into Elliot Lake and have a look around. Nice homes here for sale at under 100K (Even Condos for around 30K ) and if you want to spend more , buy a lakeside property for 250K or more…Great people, lots of outdoor activities, and a great sense of Community and Friendliness among its residents…Jobs are in short supply, but if you have a Business Idea, bring it on!!

      Reply

  2. Sorry to be picky but this chart should read price to income not income to price.

    Reply

  3. Thanks for this. Moneysense is now my “go to” source of investment advice. Buy high and sell higher. What could possibly go wrong?

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  4. While St Catharines Niagara is currently #13 , with a growing zone that is the same as a lot of the lower mainland in BC, proximity to the lake and the border as well as being rich in history, having many amazing wineries and other treasures to discover, I can see St Catharines Niagara going up on this list rapidly. The Region has a strong and progressive leadership committed to moving the area to economic prosperity and this year made a great achievement by getting the Government of Ontario to commit to extending the Go train out to the Niagara Region. Homes can be bought in the Niagara Region for a substantial amount less than the GTA. As an example for $400K you can get a fully renovated bungalow near the lake in St Catharines or about $300 in Niagara falls, while the same home in Burlington would be about 1.5 million and about 2 million in Oakville. I think that is worth an extra 30 minute drive from Burlington don’t you. Young families could afford to have one parent stay at home with the kids and still have a great lifestyle. Oh did I mention St Catharines usually has the cheapest gas in Ontario….

    St Catharines also has a large University, Brock which is constantly evolving and growing it’s programs and Niagara College. It is only a matter of time before other people and companies discover that this area is this amazing hidden treasure with inexpensive houses and commercial property, a strong infrastructure and a wonderful and friendly community. I made the move from the GTA a couple of years ago, and it was the best thing I ever did.

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  5. Although much of this list may not be useful there does seem to be lots of investment opportunity in Ontario outside of Toronto. There seems to be a trend, and this is only anecdotal by the way and if I were to buy I’d do a little more research, with people living outside Toronto and driving into work in the suburbs like Scarborough where there is a lot of opportunity. Home prices are cheaper, they’re nicer communities in many ways, and with the congestion of Toronto it seems like a 45 minute drive on the highway to work at a Scarborough office may actually be better than sitting in Toronto traffic for an hour. So, although I wouldn’t even consider buying in Vancouver right now, I would have a look at Guelph, Hamilton or Brantford any day or even other smaller towns about 45 minutes or an hour from Toronto.

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  6. Given the criteria they had talked about that put Thunder Bay on top of this list, I’d encourage the writers of this list to have a look at Lethbridge,Ab.

    Not only do they have a tonne of rentals and student population, the real estate returns have been fantastic there. The incomes in southern Alberta tend to migrate north of 50-60k, and pretty easy to find a new build in the mid-300’s.

    You’ll only pay a fraction of the tax you’d pay in other provinces, and are only 2 hours away from a major Canadian centre.

    Seems odd to me that Thunder Bay tops this list, and there are a handful of other cities of a similar size that I can think of that would be better for real estate investment.

    Reply

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