FP Answers: Where is the best value in Canada for real estate?

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The three cheapest regions in Canada where homes are under $300,000

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July 27, 20225 days ago2 minutes read 32 comments Zoocasa Realty Inc has identified the 10 cheapest regions to buy a home in Canada. Zoocasa Realty Inc has identified the 10 cheapest regions to buy a home in Canada. Photo by Mike Hensen/The London Free Press/Postmedia Network

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In an increasingly complex world, the Financial Post should be the first place you look for answers. Our FP Answers initiative puts readers in the driver’s seat: you ask questions and our reporters find answers not just for you, but for all of our readers. Today we’re answering a question from Brian about real estate.

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Canadian real estate has appreciated in value since 2020 as the pandemic, low interest rates and fear of missing out (FOMO) have pushed home prices to record highs and pushed many potential homebuyers out of the market.

Although the Canadian Real Estate Association (CREA) reported June home sales were down 5.6 percent from the previous month, the national median home price was down just 1.8 percent from the same month last year to 665,580, despite rising and tighter interest rates US dollar dropped lending rates today.

Elevated rates in Toronto and Vancouver continue to drive up the high national average, but many smaller neighboring cities offer more affordable rates. You can still find value in real estate if you know exactly where to look.

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Zoocasa Realty Inc. analyzed 25 regional housing markets and ranked each market by its annual growth rate in average home prices. The online broker then determined where the average price ranked compared to the national average and identified the 10 cheapest regions and houses to buy there.

The Saguenay, Que. region tops the list for cheapest housing, with an average home price of $267,353 and a 6.6 percent annual price growth since last June. Newfoundland and Labrador, where the median regional home price is $280,200 with annual growth of 10.8 percent, ranked second. Saint John, NB holds third place with an average home cost of $294,900 and a 30.1 percent annual growth rate.

Zoocasa spokeswoman Patti Cosgarea said she was surprised at how many markets are below the national average. Canadians should continue to see prices fall as the Bank of Canada hikes rates.

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Some people may choose to wait on the sidelines while the market slows amid rising interest rates, CREA chair Jill Oudil said in the association’s June statistics report.

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But should potential homebuyers wait for prices to drop even further if a dramatic downturn in the housing market plays out?

Not according to Prof. Jill Grant, who researches housing and cities at Dalhousie University’s School of Planning in Halifax. Grant predicts that housing construction will not return to pre-pandemic levels anytime soon due to a lack of supply.

Canadians are starting more households as families get smaller and more people live alone, and housing supply in Canada hasn’t kept pace with that demand, Grant said.

No one can predict how much interest rates will rise, nor the resulting fall in house prices. But with prices down from their February highs and supply remaining tight, now could be a good time to start buying a new home.

• Email: [email protected] | Twitter: robms4

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