Best Deals in Real Estate

Bargains in this market? Believe it or not, they’re out there. We scoured the country to find the best cities to buy homes in now.

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For many buyers, the Canadian housing market is becoming a scary place. Prices are sky high and surging higher by the month. Homes are selling for tens of thousands more than even the sellers expected. Many buyers fear that if they wait, they’ll be priced right out of the market, while others worry that if they buy now, prices could tumble when mortgage rates start to creep up later this year.

Click here for the full list.

Click here for the photo gallery.

If you’re a potential buyer or real estate investor, we have some tonic for your nerves. Yes, house prices in Toronto and Vancouver are stratospheric, and yes, as a whole, Canadian homes look less affordable than ever. But real estate is local—it always has been—and there are still many pockets in the country where you can find amazing housing deals.

To find out where, we decided to take a scientific approach. We figured we could unearth the bargains in the real estate market in much the same way we find the best buys in stocks and mutual funds: by sifting through reams of hard data. In this case we looked for homes that were priced reasonably, but were still increasing in price. In addition, we looked for markets that have strong economies, so we could be sure that prices will keep going up.

We started by collecting data on 35 major markets tracked by Canada Mortgage and Housing Corporation (CMHC). Next we crunched the numbers, and assigned a letter grade to each city for value, momentum and economy. Then we combined all that info to come up with each market’s overall grade. Top cities earned an A, average prospects earned a B, while lackluster prospects were handed a C or worse.

Many individual factors went into each grade. To calculate value, for instance, we started by comparing average rents to average home prices, since we believe that one of the best indicators of a home’s financial worth is how much rent it can generate for you. A higher rent-to-house-price ratio also means it’s less likely that you’re buying into a bubble. When the annual cost of owning a house is much higher than the cost of renting an equivalent house, it often means there will be a correction to close that gap.

Next, we looked at affordability. We looked at local wages and figured out the number of years of average household income that it would take to buy the typical local home. We downgraded communities where local residents can’t afford to buy homes easily; we gave high marks to cities where they could. The differences between communities can be huge. In Windsor, Ont., it turns out, a family needs barely two years of average household income to buy a home; in Vancouver, a family needs seven.

But value isn’t everything. No one wants to buy in a market where houses are cheap, but prices are dropping. We wanted cities that are on the rise—where you can get a house for a good price now, then sit back and watch your home’s value climb. To find such places, we rated each of our 35 cities on momentum, a measure of how hot each market is. We did that by looking at home sales compared to new real estate listings. A higher number of sales for every listing indicates that homes are selling relatively quickly. We also looked at how fast home prices have gone up over the last year, and over the last four years. Lastly, we considered how much rents have gone up over the past four years, since rapidly rising rents indicate a community with a pent-up demand for housing.

Of course the same forces that drive up prices in a city can also turn in the opposite direction. To avoid being taken in by cities with weakening job markets, we devoted our final grade to the strength of the local economy. We looked at how fast each community grew in the last four years. We also factored in 2009 unemployment rates, discretionary income levels, and a CMHC unemployment forecast for 2010.

Finally, we rolled our grades for value, momentum and economic outlook into one overall grade for each community (giving the ‘value’ score a heavier weighting than ‘momentum’ and ‘economy’) and put together an all-star list of the cities offering the best real estate deals. We did that by selecting all the cities that earned a B+ or higher in their overall grade, but we didn’t stop there. We noticed that some of our cities—namely Saguenay, Windsor, Trois Rivières and Thunder Bay—didn’t get a high grade because they had uniformly high marks across the board. They placed well because they had dirt cheap homes due to high unemployment and a sagging local economy. So we decided to discard any city that earned less than a B- in any of the three subcategories.

As you can see in “Where to buy now” (below) that left us with two big winners— Moncton and Regina—each of which scored an A-. Both cities have relatively low home prices, strong sales and good economies. Coming in with a solid B+ were seven runners-up: Fredericton, St. John’s, Ottawa, Gatineau, Winnipeg, Guelph and Saint John. All have reasonable home prices, strong momentum in the housing market and decent economic prospects.

Our research should cheer up many house hunters—it suggests that despite  soaring prices, you can still find bargains in every part of Canada. We caution you, however, to use our results with care. Nobody can know with certainty what a city’s economy will be like in 10 years, and there may be mitigating factors in individual markets that weren’t picked up by our data. Still, we think our ratings make a great starting point for both real estate investors and those looking to move to a city with more reasonable housing costs. Read on for a more in-depth analysis of each of this year’s top places to buy.

98 comments on “Best Deals in Real Estate

  1. Regina? Seriously? You clearly don't live here. The "average" house price is skewed downward by a lower priced slum-like properties in the core and north-central areas. If you want to buy even a modest sized house in a neighborhood where you can go outside after dark, you're looking at an average housing price similar to Calgary and Edmonton. Add to this average wages that are significantly lower than those two markets and you'll quickly realize the same thing that most Regina citizens already know: the current housing prices here are unsustainable in the long term and we're due for a crash. So if you want to speculate in the Regina real estate market, consider yourselves warned.

    Reply

  2. not sure what your idea of affordable housing is but houses in Ottawa have gone through the roof (no pun intended) over the last couple of years. Several neighbourhoods are simply out of reach for most people now, such as Wellington Village where $549,000 gets you an old house with no garage, a basement that is too low /damp for anything but storage and possibly another $ 50-100,000 in renos…similar in Westboro, the Glebe, Ottawa South, Alta Vista. Unless you want to live in a townhouse or have a 25-30 min drive to town, or live way out in the burbs, I wouldn't agree that Ottawa is affordable. Great if you're the seller though, there are still bidding wars and you'll probably get at least 10-15,000 over your asking price…sorry buyers

    Reply

    • very true

      Reply

    • Smiths Falls
      45 minutes to Ottawa less to Kanata once high way 7 is in is the least expensive place to buy in eastern Ontario

      check it out

      The rideau canal runs right through it

      Reply

  3. 340
    How about communities outside of City of Toronto – possibly Brampton or Oshawa. How did they score. Curious.

    Reply

  4. not seeing the list? is it a secret?

    Reply

  5. I see two pages os preamble but no conclusions. Is there a URL or some access code for a list of cities????

    Reply

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  7. Moncton? Really? The huge number of lower end mini-homes and duplexes bring the average price down – as Kevin stated about Regina, if you want a home you can live in – in a location where you can go outside at night, you're going to see prices similar to Halifax. True – these aren't Toronto or Vancouver prices – but a "good salary" in Moncton is $60k/yr…….you do the math.

    Reply

    • reality check is full of it…you can walk "at night" pretty much anywhere in Moncton. unlike most other cities including Halifax. Housing is cheaper (has gone up in the last few years) and a much nicer city to live in.

      Reply

    • There is no area in Moncton that I am afraid to walk through at night. I live across the river in suburban Riverview, 5 minutes from downtown, and there are 4 houses for sale on my street, all ranging in price from $140,000 to $160,000.

      Reply

      • what does the job market look like

        Reply

  8. Just north of Moncton is the city of Miramichi, the fourth largest city in New Brunswick. It has amazing deals on homes, lovely homes, many right on the banks of the Mighty Miramichi River and it has all the facilities one could need and if you really want more, well Moncton is just an hour and a half drive away. Not only that the the people in Miramichi are really nice and friendly.

    Reply

    • I agree with your comments about Miramichi. However, Miramichi has no jobs.. I also agree with Moncton Homeowner. Moncon is safe everywhere. I would even walk through the low rentals at night.

      Reply

  9. Housing in the Metro Moncton market (Moncton – Dieppe – Riverview) is indeed affordable and people are moving here for affordable housing and the quality of life.
    New housing sales make up 25% (that's one in four) of all residential MLS® sales.
    I will comment that the average sale price in the article could be for the Moncton Census Metropolitan Area as the average sale price in the metro market is running around the $170,000 mark so far this year.

    Reply

  10. Great post! in Calgary the market is a little slower than it has been in the past few months, buyers are worried about getting in the market at the right or wrong time, but to be optimistic, real estate eventually goes up, it will only go down if you have to sell it in a bad market.

    Reply

  11. If you live in Vancouver you say seven years for an average family to buy a house, well by that time the market has again doubled, so you have no hope in hell to purchase a place. Even in the outskirts the market is outrages. Vancouver is beautiful to life no doubt, but very, very expensive…..I really don't know who is setting those prices, is it the real estate?? Because quite frankly young couples can't seem to be able to purchase a place even if the both work.

    Reply

  12. How will be the market in Drumheller, AB. Any comments on this..
    I am planing to buy few properties here in Drumheller, AB

    Please advice guys…

    thanks

    Reply

  13. If you live in a suburb in Surrey, B.C., which is outside of Vancouver by 25 miles, you are looking at homes ranging from 359,000 to 1.2 million. Expensive and if you work in Vancovuer, the commute is an hour in traffic but less time by their transit system. However, there are apartment style condos that are selling for $139,000.00 but they have chopped all the trees down and just destroyed the vegetation around it also. This is yet another city going to condo living that is outrageous in prices and I find that people are stupid enough to pay those prices. Why is real estate such a good investment? Stick to investments in the stock market that will pay good returns over time.

    Thanks for reading.

    Reply

  14. Check Nova Scotia….MUCH MUCH better

    Reply

  15. Regina?? The house they show is in an area full of crime, I would not raise my family there. Only a few blocks from were Tamara Keepness was kidnapped a few years ago. We are currently house shopping and finding anything lower than $400,000 is a challenge.

    Reply

  16. Winnipeg housing: used homes under $250,000 are overpriced. Winnipeg best value is in new homes (price also includes approx 5% price increase since early spring) Custom built home better than average finishes1090 Sq. Ft. Cost @ $260,000 includes GST and (small) lot, cost of $75,000; in excellent location. Wpg. house taxes are a little high @ $3,800+/- for this home Condos developments are increasing and prices are also on the rise. Economy is reasonable and Winnipeg Jets will return some day.

    Reply

  17. White Rock/Surey,

    I enjoyed your overview but am forced to weigh in with those who say even with both spouses or both common-law working, city/suburb living is expensive in all categories. Time for the government to step up and protect homebuyers.
    I bought a home in cloverdale and can't sell my condo in White Rock, Madness!….Chris

    Reply

  18. CHECK OUT CHILLIWACK BC, I AM SELLING A 4900 SQ FT HOUSE WITH LARGE CORNER LOT ON A CULDISAC IN SARDIS (THE NICE AREA) CLOSE TO ALL LEVEL OF SCHOOLS. I THINK THIS IN VAN, TORONTO, MTL, EVEN REGINA WOULD SELL FOR 1M OR BETTER.

    Reply

    • I do not see a price listed care to share what our hoping to get??

      Reply

  19. My husband and I have lived in Calgary for over 30 years now, originially from Tillsonburg, Ontario. Have enjoyed our years in Calgary and the conveniences offered to our family. Four years ago we purchased a second home in Kimberley BC nestled in the East Kootenay Rockies, a very pleasant 4 hour drive from Calgary. House prices are a bargain considering all the amenities that Kimberley offers. Check out the numberous websites http://www.city.kimberley.bc.ca Guess where my husband and I will be retiring? Cheers Marg

    Reply

  20. Continued comments of Kimberley BC – over 5 great golf courses within a 1/2 hour drive, international airport, new aquatic centre as well as a new convention centre being built, art central, great restaurants, all the shopping you will need and if not Cranbrook is a 1/2 hour drive. Do not forget the great fishing, lakes close by and hiking. In winter you have the Kimberley A;pine Resort with down hill skiing, the best Nordic Trails for x-country. We have met many new young families who have moved to the area because of the life style available and the affordability. Did I happen to mention that we only have ONE Stop Light? All levels of schools are available in Kimberley plus a private school – College of the Rockies in Cranbrook. Check out MLS.ca for the great house prices – on condos, older homes and newer higher end homes up at the ski hill. Come and enjoy our many Festivals, the Great Friendly People, the Best of Out Door Activities, the Frest Air and Wonderful Views. And Yes Kimberley is a City. Check Kimberley out – you will not be disappointed. Cheers Marg

    Reply

  21. Yea come to B.C. where you get taxed on top of tax, I have had it up to my ears and ready to move out

    Reply

    • Researching Sales Tax in each province using Wikipedia – Sales Taxes in Canada. At 12% HST, it looks like BC is not bad – certainly less than or the same as PEI, Quebec, Ontario, Manitoba, New Brunswick, Nova Scotia, Labrador and Newfoundland. HST is nothing new as BC is just following along with Ontario, NB, Nfld and NS. Taxes are always hard to swallow. A provincial sales tax might be an idea for Alberta to consider, just so that we could get some decent health care.

      Reply

  22. well clearly LONDON,ONTARIO has been over looked where duplexes in the east end are still going for 60,000.where realeaste agents are expecting multiple offers and not getting what they expected.we have a low unemployment rate.GREAT CUMMUNITIES ARE BEING OVER LOOKED .i think i will sit on my duplex till we are stopped from being over looked.!!

    Reply

  23. I don't see Saskatoon mentioned..one of the most beautiful cities in the country. However, you will pay, and pay plenty. A 1200 sq foot house, 60 years old, will cost you well over 400,000. much higher than Regina. But then, who would want to live in Regina?

    Reply

  24. You have it all wrong – Canada's southernmost community – Windsor Ontario. Awesome climate, surrounded by water, single family homes – 3 bdrm. 1.5 bath and attached garage for $150,000 . Can't beat it and the people are the best, most friendly in the country!

    Reply

  25. i think they missed the point of the excercise… 350 k is not a starter price! they should have looked around outside of the main cities, there are still excellent buys in the smaller towns just an hour or so outside of the 'big' cities and the livin' is easy…..

    Reply

  26. Good Topic folks. i bought my house on 11 acres between saskatoon and humboldt in oct/09 for 145,000 it was listed at 179,000. i did this after virtually learning the saskatoon and regina markets priced below 250000 inside and out. i will say two buys i regret losing are a house in montgomery in saskatoon for 179,000 last year 4 level split and worth every penny i bet to the lucky new owners! haha also back in 05 i nearly bought a house on 900 blk winnipeg oulining eastview (great transitional/commercial area) for 75,000 !!! damn bank there LOL and also nearly did a private sale for a house in odessa 45 min east of regina for 52,000 (thank you jesus i didnt) in 07 but they sold it for 85,000 to some BC folks who are waiting to get out. i believe the point was about value not crime. we have lots of both in sask. i believe 100 percent the droves of folks coming into these cities cannot sustain in cruel economies forever so they are following the saskies back home and again we are finally really noticing competition in labour as well as housing. this reflects the social values held locally, hark work and cultural equality is the backbone of sask. in fact american elections ads are comparing state income tax to sask provincial income tax incentives. yes really. there are so many high paying jobs being created by well managed industries. people are moving here and landlords and agents are winning the lottery in saskatoon (where there have been discussions of rent control..) while the regina city reputation is super bad (thanks macleans) and yes that house pictured is nearby the east of reginas downtown "core" (where tamras former house is a 15 minutes walk across 3 busy streets), that house shown is NOT in or near "the hood" nor is that area shown associated with elevated crime…but i do agree with the 1st post anyway because its too high a price even for a brand new house BECAUSE its compensating for the bubble houses of the 500000+ range that should not have been so numerously built in such a sensible economy they are not sustainable and you can see their burden to the tax payers. that being said along with much i havent said the mayor of regina needs some competition like NOW … too much pin cushioning. you have to strike while the iron is hot where ever you are but in sask its make hay while the sun shines.

    Reply

  27. as noted in the article, it really depends on if you are in the market for profit or for a home. same goes for the type of mortgage you might want.
    Mortgage Rates

    Reply

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