The following is a guest column by Ben Myers, Senior VP Market Research and Analytics at Fortress Real Developments. Fortress Real Developments partners with builders and developers across Canada and Ben assists in evaluating the market and projects that Fortress engages in.
Have you complained about high housing prices in Canada? You are not alone. I hate to admit it, but I have complained about prices too. The May TREB figures indicate that the average resale single-detached home sold in Toronto was $1.15 million. How about the average new single-detached home in the City of Toronto? $2.35 million according to CMHC. Vancouver new singles were nearly $2.7 million on average in April!
Because I work in the real estate business, I get the high house price complaints quite frequently. My new go-to response (so I don’t have to go through my typical immigration + low interest rates + stable banking + international investment + urban desirability diatribe) is “Why don’t you move?”
No one has ever responded with “I am, and where do you suggest?” But if they do, I figured I’d better be prepared. A couple days ago, MoneySense Magazine published their annual Canada’s Best Place to Live 2015, a ranking of 209 small, medium and small cities and towns in our great country. I won’t go through their entire methodology, but they looked at population growth, walkability, unemployment, household income, weather, transit, income taxes, crime, culture and several other factors to determine which are the best cities to live in Canada for families, new immigrants, retirees and overall. I compared these rankings against BuzzBuzzHome data for 86 municipalities in BC, Alberta, Manitoba and Ontario. I wanted to see which areas provided the best value (low new house prices and high MoneySense place ranking), how the big cities in Canada stacked up and which had the worst value (high prices, low place ranking). Check out the table below.
Looks like I should recommend Stratford as an ideal place to move, the 7th best place to live in Canada per MoneySense, but the 73rd ranked by new home prices at just $200 psf. The average new home will run you about $290,000 in Stratford, and it is a perfect place to live if you are a fan of Shakespeare! What about Brandon, Manitoba at just $174 psf? I’m seeing a brand new 2,200 sf condominium townhouse priced at $299,900 online, any takers? Perhaps the sleepy little Town of St Albert, just outside Edmonton, is the ideal spot for you. Minutes from the big city at just $257 psf.
In terms of the worst value, Kawartha Lakes and Abbotsford are near the bottom of the list. Lower oil prices, a low ranked municipality and high new housing prices makes Wood Buffalo (ie. Fort McMurray area) the lowest on the list. The average new low-rise house in Wood Buffalo was priced at over $550,000 on average according to BuzzBuzzHome data, 38 per cent more than Calgary!
If a small market is not your thing, Ottawa provides the best value among the big cities, followed by Kitchener, London and Winnipeg. Not surprisingly, Toronto and Vancouver are the lowest ranking big cities.
Funny thing is, there are probably people in Stratford that complain about how high new home prices are! Most of you won’t be moving to another municipality anytime soon despite your high housing prices, but it is always interesting to do these value exercises to personally evaluate your living situation, and what you really want to pay for.
Fortress Real Developments partners with builders and developers across Canada, and Ben assists in evaluating the markets overall and projects that Fortress engages in (Twitter: @benmyers29). Follow his blog posts and commentary on the Canadian Housing Market at www.fortressrealdevelopments.com/news or for more info on real estate investing, go to www.fortressrealcapital.com