<SCRIPT src="http://fe01.livewords.search.ac4.yahoo.com/script?fr=csc_fin_pf" type=text/javascript></SCRIPT><!--Yahoo! Finance evergreen article module--><CITE>by Don Sutton, MoneySense
Wednesday, June 16, 2010</CITE><CITE class=provider>provided by</CITE>
Where do you want to live? Where can you afford to live? Every major Canadian city scoured for bargains!
It’s a crazy time for real estate in Canada. Prices are sky-high, people are feeling pressured into selling into a hot market and buyers fear purchasing an overpriced home only to see the bubble burst.
But MoneySense magazine has come to the rescue and crunched the numbers to identify the best real estate deals in the best cities.
Using hard data on 35 major housing markets, the magazine has awarded a letter grade based on how reasonable the house prices are, whether home prices are likely to rise and how prosperous the local economy is. Surprisingly, none of the winning cities are Canada’s largest, but instead reflect medium-sized cities with affordable house prices that have the ability to grow strongly with local economic conditions.
More at MoneySense:
(Opens new window)
The best deals in real estate in Canada are to be found in Moncton and Regina, both of whom received an A-, while Fredericton, St. John’s, Ottawa, Gatineau, Winnipeg, Guelph and Saint John all received a B+.
The criteria for the study was strict and comprehensive. MoneySense compared average rents to average home prices, which gives a great indicator of how valuable a home is. Next it compared local wages as to average home prices to see how long it would take for a family to purchase a home. The magazine also evaluated how quickly homes sold and prices increased over the years.
Last, the economic environment of the city was also analyzed. The magazine looked at how fast a community grew, what the unemployment rate was and what kind of discretionary income the citizens had.
This method avoided identifying cheap real estate in communities where prices were unlikely to increase due to a poor local economy or widespread unemployment.
The analysis gives a comprehensive overview of where to get the best real estate deals in Canada. The study is also useful for identifying which real estate markets to avoid. For example, Abbotsford and Montreal both only rated Cs.
MoneySense’s study also identified overpriced markets. For instance, Kelowna, B.C., scored well in the category of growth potential and has a great local economy. But the average house price makes it hard for the typical family to buy into the market. With this aspect in mind, Kelowna rated a D+ in the value category and a C+ overall.
Windsor, Ont., where house prices are among the best values in Canada, is in the opposite situation. It rated an A for affordability, but since the city is slowly recovering from deep layoffs in the car industry, it only rates a C in the momentum category and a C+ for local economy, giving it a B+ overall.
In concrete terms, what the best cities for real estate like Regina and Moncton have going for them is big-city growth and opportunities without big-city prices. While the affordability and growth value of a home are not always the prime reasons to buy in a particular location, knowing that your home is a sound investment in an economically vibrant city offers great peace of mind.
Top 5 cities:
1. Moncton A-
2. Regina A-
3. Fredericton B+
4. St. John's B+
5. Ottawa
