No question, the location and neighbourhood of your home impacts things like property value and lifestyle, but what if you can’t even afford to buy in the ‘best’ location for you or your family? The Canadian real estate market has experienced unprecedented growth, driving housing prices to record highs in many regions across the country. This makes me ask the question, is price the new location when it comes to buying a home?
The skyrocketing cost of housing in cities like Vancouver, Toronto & Calgary has made homeownership increasingly out of reach for many Canadians, particularly first-time buyers and young families. As a result, buyers are forced to prioritize affordability above all else, often sacrificing their preferred location in favour of options within their budget.
There’s a persistent imbalance between supply and demand in Canada's housing market that has created a scarcity of available properties, particularly in desirable urban centres. With limited options to choose from, buyers are forced to expand their search to more affordable suburban or bedroom communities where housing prices may be lower.
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Some buyers are purchasing properties in less desirable neighbourhoods or up-and-coming areas with the expectation of future appreciation and investment potential.
Erin Best
Director of Real Estate & Industry Engagement
As housing prices continue to rise, many buyers are opting to trade a shorter commute for more affordable housing options in outlying suburbs or satellite communities. While this may mean sacrificing proximity to urban amenities and employment opportunities, buyers are willing to make the trade-off in exchange for homeownership within their budget.
Some buyers are purchasing properties in less desirable neighbourhoods or up-and-coming areas with the expectation of future appreciation and investment potential. While these areas may not offer the same amenities or prestige as more established neighbourhoods, they present an opportunity for buyers to enter the market at a lower price point and potentially reap the rewards of future gentrification and development.
Let’s take a closer look at what this looks like. The home that meets a family’s needs is typically three bedrooms and two bathrooms. In Vancouver, you can find those types of properties but they vary between apartment style condos, townhouses and half duplexes.
The trend of home buyers in Canada prioritizing price point over location reflects the growing challenges of affordability and limited inventory in the country's housing market. As housing prices continue to rise, buyers are forced to make difficult trade-offs and compromises in order to achieve homeownership within their budget. This shift in priorities has reshaped buyer behaviour, market dynamics and the geographical distribution of housing demand across the country.
For the purpose of this discussion, you can get a three-bedroom, two-bathroom strata unit in Vancouver’s West End for just over $1.7 million. It gives you over 1,500 square feet, and a great downtown location with nice amenities.
When we compare that to alternative properties, we can do it in a couple of ways. First, we could compare what you would pay in a neighbourhood further out for the same type of property.
If you’re willing to head to Burnaby, a three-bedroom, two-bathroom penthouse unit is priced at just under $1 million at $925,000. In this case, you’re still getting over 1,500 square feet of living space plus a 790 square foot terrace. While it may seemingly lack in amenities, it carries affordability by Vancouver standards in spades.
Second, we could compare what that $1.7 million will get you elsewhere. If you’re willing to head to Vancouver’s Renfrew neighbourhood, you can find a newer half duplex offering three bedrooms and three bathrooms for less!
While each property caters to different lifestyles, it’s important to note the differences. When buying a home, what becomes the most important thing to you? If you’re willing to compromise on the commute or proximity to the downtown core, your dollar buys you a whole lot more house further out.
The COVID-19 pandemic also prompted a shift in lifestyle preferences among Canadian home buyers, with many prioritizing space, affordability and quality of life. Remote work is more prevalent and buyers are increasingly willing to trade city living for larger homes, outdoor space and a slower pace of life in suburban or rural areas.
While we didn’t have to do this during the pandemic, the first home we ever bought was in a bedroom community outside of Edmonton, Alberta. For the same price of an inner city home on a standard 6,000 square foot lot, we were able to get a sprawling single detached family home with a double attached garage on 1/6th of an acre. It was walking distance from parks, running trails, a golf course - we decided that while our kids were younger, proximity to walking trails and a quieter lifestyle would be better. Almost a decade later, we have no regrets about that choice.
The trend of home buyers in Canada prioritizing price point over location reflects the growing challenges of affordability and limited inventory in the country's housing market. As housing prices continue to rise, buyers are forced to make difficult trade-offs and compromises in order to achieve homeownership within their budget. This shift in priorities has reshaped buyer behaviour, market dynamics and the geographical distribution of housing demand across the country.
Best,
E
