When MoneySense Magazine crunched its numbers on the best Canadian cities in which to buy real-estate, staffers were a bit surprised by the results.
It seems the big cities in which investors hope to make the biggest hit are simply OK when it comes to real-estate investing. The best places are cities like Thunder Bay, Barrie and Brantford in Ontario, though larger cities like Calgary and Edmonton did sneak into the top five (mostly on past performance and not in light of more recent news surrounding oil prices).
Thunder Bay was once a very prominent city in Canada, located atop Lake Superior and providing the perfect gateway between the Canadian east and west. As with many locations across the country, Thunder Bay began as a trading post in the 17th century and grew as a transportation hub due to its location at the northern tip of the Great Lakes. It has been a trade route staple for moving grain from the prairies to the eastern provinces for centuries. Over the course of the 19th Century, the area’s two main cities (Fort William and Port Arthur) thrived in the mining and forestry industries, in addition to prospering in transportation. The cities and surrounding territories were amalgamated as Thunder Bay in 1970.
In the recent past, the city of 108,000 has been making itself over from a mining and forestry city to a knowledge-based economy. And apparently, it’s working, as the city has become an important centre for medical, commercial and government for Northern Ontario and more people look at it as a place to put down roots.
The city established the Northern School of Medicine in 2005, and according to MoneySense, it paid off with an influx of students, which in turn resulted in a 21 percent increase in rental rates over the past five years, while keeping the vacancy rate fairly low.
Factor in that home purchase affordability is fairly low, at an average of just under $209,000, and you have the grounds for attracting new residents. The current household income reportedly stands at about $78,000, so you have the perfect mixture of disposable income and cheap housing, says MoneySense.
By comparison, Toronto’s average home price stands just shy of $590,000 and household income is at about $105,000.
It was mostly for those reasons that Toronto ranked just outside the top 10. Still a respectable No. 12, Toronto made it on its low vacancy rates, great employment opportunities and high salaries, says MoneySense (which ranked Canada’s other largest city, Vancouver, 18th for many of the same reasons that also include solid development growth).
Which doesn’t mean Toronto isn’t a great city in which to buy real estate. You just have to shop around more.
Neighbourhoods such as Pleasant View offer an affordable change from its trendy neighbours (Bayview Village and Henry Farm), with the average price just higher than the city average (but nearly half that of its neighbouring communities).
If you want to live closer to the city core, the magazine lists the Upper Beaches (which is not only at roughly the city average housing cost but also boasts some of the best primary and secondary schools rated by the Fraser Institute), Regent Park (which has come a long way from its “slummy” days to feature affordable housing for urban professionals who want a short hike to downtown offices) Hillcrest Village (again for its superiorly ranked schools) and Little Portugal.
Feature image – Thunder Bay via Wikipedia Commons