Real Estate

Canada's Housing Market: Where to Buy (and Avoid) in 2024

Canada's Housing Market: Where to Buy (and Avoid) in 2024
Written by
  • Ashley Howard
| 25 January 2024
Reviewed, 25 January 2024
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    As we enter 2024, housing affordability, interest rates, and supply constraints continue to put pressure on the housing market. It’s now more important than ever to find the right location that fits your budget and lifestyle and has investment potential. 

    Are you looking to invest in real estate in Canada this year? Do you have the freedom to move? If so, take a look at Canada’s top real estate hot spots to see where you should buy and where you should avoid based on cost of living, jobs, infrastructure and population growth.

    Whether you’re a first-time buyer, a seasoned investor, or simply curious about what the future holds for Canada’s housing market, this post will look at the state of the housing market across various regions in the country.

    Key Takeaways

    • Affordability and population growth both play significant roles in driving housing demand.
    • The best cities to invest in real estate are those with strong labour markets, growing populations and affordable housing.
    • The worst cities to invest in real estate are those with declining populations, weak labour markets, housing shortages and high home prices.

    Factors Influencing the Housing Market in Canada

    The housing market in Canada is influenced by several factors, including the Bank of Canada policy rate, interest rates, Inflation, bond yields, housing supply, and population growth, which together have varying impacts on property prices. 

    Affordability plays a significant role in determining the attractiveness of a housing market. Economic conditions influence all interest rates in the country and can impact home prices. High home prices, particularly in large urban areas or highly sought-after regions relative to median incomes, can discourage potential buyers. 

    The BoC uses the policy rate as a monetary policy tool to control inflation. This policy rate is then used to set variable mortgage rates in Canada. Bond yields with comparable terms determine fixed mortgage rates. High interest rates impact affordability, making it harder to qualify for a mortgage and can discourage potential borrowers from entering the housing market. 

    Cities with strong job markets and more diverse industries tend to attract more residents, driving up demand for housing. Proximity to universities and research institutions can also contribute to a hot real estate market as students and faculty members seek housing options. 

    Population growth is a significant driver of housing demand. Cities experiencing steady population growth tend to have a robust housing market, as the increased demand for housing can drive up prices. Housing demand and the imbalance between supply and demand have kept property prices high recently. Population growth continues to outstrip supply, leading to shortages across the country making it difficult for many to enter the housing market. 

    Best Cities for Real Estate Investment in 2024

    Major cities like Toronto and Vancouver have long been hotspots for relocation for job opportunities, further education, entertainment, culture, and hot real estate markets. However, several lesser-known up-and-coming cities in Canada offer exciting opportunities for buyers in 2024. These cities may not be on your radar, but they have shown promising signs of growth and development.

    Halifax 

    Population: Approx. 480,000

    Average Monthly Mortgage Payment: $2,472*

    *Based on the benchmark price of $511,600 in Halifax-Dartmouth as of January 2024, a 20% downpayment and 5.39% interest rate.

    Located on the east coast of Canada, Halifax has emerged as a city with significant potential for real estate investment. The city’s growing population, relatively affordable housing, tourism and beautiful coastal scenery make it an attractive destination for residents and investors.

    Victoria

    Population: Approx. 398,000

    Average Monthly Mortgage Payment: $4,146*

    *Based on the benchmark price of $858,100 in Victoria as of January 2024, a 20% downpayment and 5.39% interest rate.

    Situated on Vancouver Island, Victoria, the capital of British Columbia, it offers a charming blend of natural beauty and city amenities. The city’s strong economy and mild climate make it an appealing choice for potential residents and investors looking for opportunities outside of the mainland.

    Kitchener-Waterloo

    Population: Approx. 586,000

    Average Monthly Mortgage Payment: $3,410

    *Based on the benchmark price of $705,700 in Kitchener-Waterloo as of January 2024, a 20% downpayment and 5.39% interest rate.

    Located in the heart of Ontario’s technology corridor, Kitchener-Waterloo has experienced significant growth in recent years. With a strong tech industry and renowned universities, the region has become an attractive destination for newcomers and investors.

    Saskatoon

    Population: Approx. 342,000

    Average Monthly Mortgage Payment: $1,648

    *Based on the benchmark price of $341,100 in Saskatoon as of January 2024, a 20% downpayment and 5.39% interest rate.

    As the largest city in Saskatchewan, Saskatoon has seen steady population growth and economic development. The city’s affordable housing market, strong job market, and investments in infrastructure make it a promising location for potential homeowners in 2024.

    Cities to Avoid in Canada’s Housing Market in 2024

    Canada offers numerous real estate opportunities for buyers and investors; however, some cities may not be the best choice for real estate. These cities may face challenges such as declining populations, limited job opportunities, housing supply issues, or housing markets that are stagnant when compared to other cities in Canada.

    St. John’s

    Population: Approx. 224,000

    Average Monthly Mortgage Payment: $1,621

    *Based on the benchmark price of $335,400 in St. John’s as of January 2024, a 20% downpayment and 5.39% interest rate.

    The capital city of Newfoundland and Labrador, St. John’s, has experienced economic challenges in recent years due to increases in population and competition in an already tight labour market. Newfoundland and Labrador had the highest unemployment rate in Canada in 2023. These economic conditions have impacted the city’s housing market, making it less attractive for buyers and investors.

    Edmonton

    Population: Approx. 1,568,000

    Average Monthly Mortgage Payment: $1,790

    *Based on the benchmark price of $370,500 in Edmonton as of January 2024, a 20% downpayment and 5.39% interest rate.

    Edmonton, Alberta’s capital city, is one of the fastest-growing cities in Canada. It has seen a surge in population growth compared to other cities, with many relocating from other provinces to access more affordable housing. This growth has put a strain on the housing market. Meanwhile, home prices are only expected to see modest gains over the next year. 

    London

    Population: Approx. 519,000

    Average Monthly Mortgage Payment: $2,760

    *Based on the benchmark price of $571,200 in London as of January 2024, a 20% downpayment and 5.39% interest rate.

    London, Ontario, has experienced economic fluctuations in recent years due to its competitive job market, high rental costs, lack of childcare options, and a real estate market that has seen home prices stagnate. The city’s sluggish housing market makes it a less desirable choice for real estate.

    Thunder Bay

    Population: Approx. 113,800

    Average Monthly Mortgage Payment: $1,471

    *Based on the average price of $304,487 in Thunder Bay as of January 2024, a 20% downpayment and 5.39% interest rate.

    Located in Northwestern Ontario, Thunder Bay has faced challenges related to harsh weather, slow population growth and limited job opportunities. These factors make the housing market a less favourable choice for relocating and investing in real estate.

    Resources for Researching Canada’s Housing Market

    Researching Canada’s housing market can be overwhelming, given the vast amount of information available. However, several resources can provide valuable insights and help :

    • Canadian Real Estate Association (CREA): CREA offers up-to-date data on the Canadian housing market. Their website provides access to market statistics, reports, and analysis that can help buyers and investors understand current market trends and conditions. 
    • Local real estate boards: Local real estate boards provide valuable information on specific regions and cities. They offer market reports, sales data, and expert insights into local market conditions so you can narrow down and focus your search.
    • Canada Mortgage and Housing Corporation (CMHC): CMHC is a government agency that provides information on housing market trends, affordability, and housing statistics. Their website offers reports, research publications, and market analysis tools.
    • Bank and financial institution reports: Banks and financial institutions often publish economic reports and research relevant to the housing market. These reports provide valuable insights into economic conditions, interest rates, and market trends.
    • Real estate investment forums and online communities: Online forums and communities dedicated to real estate can provide a wealth of information and insights from experienced investors. Engaging with these communities can help investors gain a broader perspective on the market.
    • Local experts and professionals: Consulting with local real estate agents, mortgage experts, and financial advisors can provide valuable insights into specific localized markets. These professionals have firsthand knowledge of local conditions and can offer personalized advice based on your financial situation.

    Final Thoughts

    As we begin the year, Canada’s housing market presents unique opportunities and challenges for buyers and investors. Understanding what influences the market, researching regional trends, and staying informed and updated on real estate news and government policy decisions can help determine if 2024 is the best time to buy a home in your desired location. 

    If you’re ready to purchase or need tailored advice, contact us and see how we can help you enter the housing market in 2024.