Looking at the price of real estate in Canada, you might think that the dream of buying your first home is just that: a dream. With mortgage costs driven upwards by high interest rates and ever-increasing housing prices (the national average is up two per cent to nearly $700,000 in the past year according to the Canadian Real Estate Association), first-time homebuyers might be tempted to give up. However, there are options. You can scale down and live in something small like a tiny home or look outside the major centres for affordable opportunities.
Related: Buying a Home for the First Time? Here Are 10 Easy Ways to Save Money
With the work-from-home trend that came with COVID-19, many more people are living further from urban centres, choosing a rural lifestyle over the hectic pace of the big city. This doesn’t mean you’ll be isolated. Many attractive and affordable rural locations are near towns that are large enough to support schools, hospitals and familiar big box stores.
If you’re asking yourself, “How much house can I afford in Canada?” our cross-country sample can give you an idea of where to find the cheapest places to buy a home. These locations are just to get you thinking. Prepare to invest some time to find the right spot that balances affordability and lifestyle. Remember that the best areas to look at are buyer’s markets with a lot of inventory.
Saskatchewan
Saskatchewan has always been an attractive option for first-time homebuyers and 2024 is no exception. According to CREA, the average home price in the province is $334,500. Regina’s average is slightly lower at $313,100 and Saskatoon’s average is $394,300. Going outside the cities is where the real bargains are, especially larger properties with space for rental suites. In the more rural areas, where the cost of living is lower, average prices drop. For example, the average is just over $272,000 in the border town (Alberta/Saskatchewan) of Lloydminster and $208,800 in the southeastern part of the province.
The government can help, too. Saskatchewan’s First-Time Homebuyers’ Tax Credit provides a non-refundable income tax credit of up to $1,050. In addition, the Graduate Retention Program may help with your down payment. Saskatchewan’s affordable housing, stable market conditions and available incentives make it an excellent location for first-time homebuyers in 2024.
Related: How to Buy a Home: A Step-by-Step Guide for First-Time Homebuyers
Nova Scotia
Nova Scotia’s average home price is $402,200, significantly lower than the Canadian average of $698,530. Those low prices haven’t gone unnoticed in the rest of the country. Cody Sentner, a Nova Scotia-based Realtor with KW Select Realty, says there’s been a post-COVID boom in the province.
“I’m seeing a large number of first-time homebuyers moving to areas just outside of central Halifax. Places like Sackville, Dartmouth and Oakfield. Plus a lot of activity and massive growth in areas just outside the Halifax Regional Municipality (HRM), like Enfield, Elmsdale and Lantz.”
“Generally speaking, for a great single-family home in a subdivision or main road in Enfield, Elmsdale, Lantz or Milford you can expect to spend around $400,000 and up.”
Related: Scott McGillivray Reveals 10 Homebuying Myths You Need to Stop Believing
He points to price, easy commutes and the local lifestyle as the main draws to the province. “One of the best things about Nova Scotia for me is our abundance of bodies of water. I find listening to, looking at and just being around water to be very therapeutic, and never being more than a short drive or walk to a beautiful lake, river or coast is something I take great comfort in.”
Even though it’s a seller’s market, Sentner says if you keep at it and are flexible, great deals and opportunities can be found in Nova Scotia.
British Columbia
Housing prices in BC are high, especially in Vancouver and on Vancouver Island. But, if you’ve got your heart set on BC, where the average price is over $1 million, many places have prices far below the provincial average.
Look for opportunities in and around Prince George where you can still find single-family homes in the $500,000 range. More rural parts of the province offer even more affordability, but you have to decide if the location fits your lifestyle.
Toronto
Not everyone wants to (or can) move across the country for more affordable housing. What do you do if you’re in an expensive market and want to stay? Let’s look at Toronto as an example.
Being a first-time homebuyer is daunting, especially in the GTA, where basic starter homes go for over $1 million, which is out of reach for most first-time buyers. But, according to Matthew Lee and Ming Lim of Volition Properties, a Toronto-based real estate investment advisory and realty firm, there are opportunities if you know where to look. Lee suggests several different options you might not have thought of.
“Buying a pre-construction condominium assignment from a distressed seller can be a tremendous way for a first-time homebuyer to get into the real estate market,” he says. “While we don’t necessarily advocate pre-construction condos as an investment, as a buyer of an assignment, you can take advantage of the tough situation that a seller might be in.”
“Many of those pre-construction buyers who bought with other agents are now approaching us to help them get out of their difficult situation, and so we have matched many of these sellers with buyer clients who buy these assignments at a significant discount.”
“While these condos are still not the “best investment” per se, they offer good value for first-time home buyers who are looking to buy a condo to live in or parents buying for their university-aged kids. One important thing to note is that there is no MLS for pre-con assignments, and you typically aren’t allowed to advertise. Your agent’s network is the most important factor in selling or buying assignments,” Lee explains.
Another option to investigate is re-sales by condo investors. A lot of Toronto rental condos are cashflow negative for the owner, which isn’t sustainable over the long term. And that, Lee says, means that many condo investors are looking to sell.
“This creates an opportunity for a first-time homebuyer because if the tenant is only on a month-to-month lease, the buyer can have the seller issue an Ontario N12 notice (notice to end the tenancy because the landlord, purchaser or family member requires the rental unit) on their behalf to the tenant indicating that the buyer legitimately intends on living in the unit. This solves a major problem for the condo investor seller, because they are anxious to get out of their cashflow negative position, and so they are willing to take a significant cut on the price. The buyer pool for this tenanted condo unit is limited because other investors are not interested in taking on such a negative cashflow condo, thus significantly reducing the pool of competition for the first-time homebuyer.”
A third opportunity is more expensive, but Lee suggests it could work for the right buyer.
“Instead of buying a condo with 20 per cent down, a buyer could buy a sub-$1 million duplex with 10 per cent down (with CMHC insurance) and have the same down payment and carry costs as a $600,000 condo. The reason for this is that you could live in one unit and rent out the other unit, which is known as house hacking.”
“While this is a bit more work, it allows you to own land instead of a box in the sky and will help you build wealth at a faster rate than just owning a condo. You absolutely need to work with an investor realtor, as there are very specific things that CMHC is looking for in the property. Otherwise, you might not qualify for the CMHC financing with 10% down,” he says.
Related: Expert Tips That Will Help You Become a Homeowner Before 40
The good news for first-time homebuyers is that interest rates may start coming down soon, and numerous regions across the country currently offer affordable opportunities. Whether in Saskatchewan or just outside of Halifax, you can find areas that offer a mix of affordability, lifestyle amenities and growth potential. Don’t forget to check out provincial government incentives — they can also help ease the burden of becoming a first-time homebuyer.
