The standard quip when it comes to buying real estate is it’s all about three things: Location, location and location. Few would argue that’s totally wrong, but clearly there’s more to it.
Affordability is a factor, but price alone doesn’t dictate good value. Sustained price gains in recent years can be another guide, but when looked at in isolation these simply tell you where others are already looking—and where you could end up overpaying. Realtors can help your search but, without prompting, may skip up-and-coming neighbourhoods and guide you to established areas with well-known appeal.
If you want a neighbourhood that offers great value, a promising return potential and the traits that translate clusters of houses into a tight knit community then we believe you need to take into account all three of these factors: Value, momentum and expert insight.
With the MoneySense “Where to Buy Now” report we won’t simply point you to obvious areas that are popular. Our goal is to help you narrow your real estate search to areas that have great appreciation potential and aren’t already on most homebuyers’ radar. There’s no question some areas will always be popular, but you’ll also pay a premium to live there. For many buyers that’s simply not an option today, particularly in hot markets like Toronto and Vancouver.
This year we’ve expanded the rankings to include every neighbourhood in some of Canada’s largest centres: Vancouver, Victoria, Calgary, Edmonton, Winnipeg, Toronto, Hamilton, Ottawa and Montreal. Across all of those markets our report ranks 1,915 neighbourhoods, offering detailed localized data on each one to help you in your search.
How we do it
To identify the top neighbourhoods we start by looking at value. To be clear, when we say value we aren’t simply looking for the cheapest areas. Cheap prices alone could be indicative of neighbourhoods mired by social problems, or that lack amenities and offer little in the way of a return on your investment.
Instead, we’re looking for relative value, when a neighbourhood is more affordable than areas nearby. We measure this by comparing the average home prices in each neighbourhood to prices in the surrounding area, the metro district and the greater municipality.
Next we scour each market looking for areas where homes are appreciating faster than in other parts of the city over the past one, three and five years. With this data we’re looking for signs of sustained price gains which can uncover an area that is in greater demand. The stronger the overall appreciation, the higher these neighbourhoods ranked in our list.
Finally, to ensure we’re identifying desirable neighbourhoods, we consulted an extensive panel of Re/Max real estate agent experts. (In Montreal, our panel included agents from various brokerages.) In our survey, we asked them to assign a grade to each neighbourhood.
We’ve done the hard work for you, correlating value and price momentum with what realtors think about these neighbourhoods. You’ll still have to do some of your own research to find areas that meet your needs, but we hope this narrows down your search area to help you find and buy your dream home.