The Cost of Living in Canada’s Major Urban Centres: A Growing Concern
Adrian C. Spitters FCSI?, CFP?, CEA? President, Author, Private Wealth Advisor
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Housing Affordability Crisis Drives Canadians to Consider Relocation
New research indicates that the high cost of living, especially housing, in Canada’s major urban centers could prompt many residents to seek more affordable alternatives. A survey commissioned by Royal LePage reveals that 60% of renters and 45% of homeowners in Toronto, Vancouver, and Montreal would consider moving to a less expensive area if they can find a job there or work remotely.
"There's an old saying in real estate, 'drive until you qualify.' As housing affordability continues to deteriorate and Canadians face increasingly higher barriers to entry when buying a home, this adage is becoming more of a reality. Many aspiring homeowners in the country's largest and priciest urban centers are seriously considering relocating to less expensive cities to get a foot on the property ladder," said Karen Yolevski, COO of Royal LePage Real Estate Services Ltd.
Affordable Alternatives: Where Are Canadians Looking?
For those seriously considering relocation, Thunder Bay leads the list of the most affordable Canadian cities. Buying a home with a mortgage in this Northwestern Ontario city would require only 22.2% of a household's monthly income. This is based on an aggregate price of $299,300 in Q1 2024 and a median total household income of $84,400 (2022 stats).
Other top choices for affordability include Saint John, Red Deer, Trois-Rivières, and Edmonton, where between 25.1% and 28.9% of a household's monthly income is needed to service a mortgage payment. Preferences for relocation vary by current location, with Greater Montreal Area residents favouring Quebec City, while those in the Greater Toronto Area and Greater Vancouver Area prefer Edmonton.
Urban Centres Remain Attractive Despite Challenges
Despite the consideration of relocation, Canada’s largest urban centers are expected to continue thriving. According to Yolevski, 40% of survey respondents indicated they would not move. "Canada's largest cities offer diverse employment opportunities, endless entertainment options, and amenities. Globally, people are drawn to major cities for the lifestyle they provide. Regardless of how many residents choose to relocate, there will always be strong demand for housing in Toronto, Montreal, and Vancouver from locals and newcomers," Yolevski noted.
However, the ongoing supply-demand imbalance remains a significant challenge for those attempting to enter these markets, underscoring the urgent need to build more homes faster in cities of all sizes.
Spotlighting Western Canada Real Estate
Investment Opportunities in Western Canada's Housing Market
The current housing shortage in Canada’s major urban centers represents a significant opportunity for investors. Investing in multifamily rental properties in Western Canada can yield substantial benefits. With the increasing demand for affordable housing, these investments promise strong returns.
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For young adults aiming to save for a down payment, investing in multifamily rental apartments offers a unique opportunity. With an initial investment as low as $2,508, they can participate in the real estate market, potentially generating income while saving for their future home.
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Adrian C. Spitters, Legacy Investment, and Axcess Capital Advisors invite you to a complimentary networking event on Wednesday, June 19th, 2024, at The Terminal City Club in Vancouver, BC. This event will provide insights into navigating cash flow in Western Canada's real estate market, highlight key demand drivers, and offer expert perspectives on the real estate and private capital market in Western Canada.
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