Most Affordable Markets in Ontario in 2022
It’s no secret that the Canadian real estate market has been sizzling hot since the beginning of the pandemic. Everyone moving to Canada watched home prices all over the country soar for two years.
Those living in Canada had a seat even closer to the action. In Ontario, we watched as homebuyers headed to suburbs and small towns to find affordable homes. They found that their budget went further and discovered new things to love outside city centres.
The influx of buyers pushed prices in those areas up and put pressure on an already short supply. First-time homebuyers hoping to enter the housing market were feeling pushed out by high prices and intense competition.
We’re glad to tell you that the market is beginning to moderate! Data from the Canadian Real Estate Association put the average home price across the nation at $665,850. That represents a 2% decrease from last year and a sharper 18.5% decrease from February prices.
With an increase in interest rates and a slowdown in demand, home prices may finally be headed back to Earth. But a limited supply of houses on the market still makes finding your perfect home a challenge in Ontario.
Even though it represents a decrease, over $665,000 is still a high price. Don’t let it scare you! RE/MAX reports that there are many, many housing markets across Canada where you can buy a home for far less than that imposing national average cost.
A challenging market is not an impossible one. Today we’re going to take a look at three areas in Ontario where you can buy a home for less than $665,000.
RE/MAX refers to these areas as the most affordable in the province. But what does that mean for homebuyers? The general definitions we’ll be using involve both objective and subjective criteria.
People report that an affordable home meets their basic needs and offers at least a few livability elements. For some those elements may be living close to a school and a coffee shop. For others, they may be lots of green space and nearby recreation.
What type of home meets your basic needs and offers the livability you want is extremely subjective. It will be different for every homebuyer.
A more objective way to measure affordability is cost. Not only the cost of the home itself. Cost can be calculated as a percentage of average area income spent on monthly mortgage payments.
When surveyed, 18% of Canadians placed that percentage at between 30% and 40% for an affordable home. RE/MAX chose the three areas we’re going to look at today with that 40% in mind. Only one of the three areas is above 40% and one is below 30%.
Let’s take a look!
Windsor is the southernmost area on our list today. With an average home price of $674,637, it isn’t far off the national average. Prices here rose significantly in the past year as people moved away from larger urban centres.
This price point represents a $3,244 monthly mortgage payment, or 54.18% of the area’s average income.
With a little under 230,000 residents, Windsor is quite a change from life in Toronto. It maintains a big city feel with its proximity to Detroit. As prices cool in the region homebuyers expect the average price to drop further as we head into the fall.
Windsor is also expecting some significant new employment opportunities in healthcare and other sectors. Only about 35% of homes on the market are seeing multiple offers with 70% selling at over the asking price.
Windsor is an area that is seeing first-time homebuyers getting creative. Some are pooling finances with family and friends to enter the housing market.
Just like every city, Windsor has some neighbourhoods that are more affordable than others. The most affordable right now are Westside, Downtown, and Central Windsor.
An even more affordable area sits about five hours or so northeast of Ottawa. Unlike Windsor, Sudbury is not surrounded by large urban areas. This city of about 166,000 residents was built around 330 lakes.
By land area, Sudbury is the biggest city in the province! But it does not have the highest home prices. The average home in Sudbury currently costs $498,939. Monthly mortgage payments of $2,399 represent 40% of the average area income.
Though Sudbury did see large increases in prices in the past year, homes are still far less expensive than the national average. The biggest problem plaguing the area at the moment is low supply.
Like all Canadian markets, low supply is a long-term issue that continues to frustrate buyers. About 65% of listings are receiving multiple offers, with 81% selling for over the asking price.
If you’re looking for the most affordable neighbourhoods in this former mining and lumber town, head for Onaping Falls, Capreol, and Wahnapite.
Thunder Bay, ONTARIO
The most affordable area in Ontario is Thunder Bay. With an average home price of $370,761, monthly mortgage payments of $1,783 represent only 29.78% of the average area income.
You’re may be thinking that this city of just under 110,000 residents is inconvenient for most home buyers. Sitting on Lake Superior, it’s far from any urban centres.
But Canadians have been willing to relocate far and wide to find an affordable home. Remote work has offered many potential homebuyers the chance to consider new areas.
Thunder Bay is the largest city in the northwestern part of the province. It is home to a large number of public sector jobs with regional government offices and a large medical complex.
Are you wondering which neighbourhoods in Thunder Bay currently offer the most affordable homes? Head to Westfort, Current River, and East End to get the most bang for your buck.
Only 25% of listings are currently receiving multiple offers, with 50% selling for over the asking price.
It can feel daunting to buy a home in Ontario. But homebuyers have lots of options, from new neighbourhoods to new cities. Talk with us about finding your perfect home in Ottawa or one of these great Ontario communities.
HOUSING AFFORDABILITY IN CANADA 2022 REPORT