Southern Ontario residents want to move to these affordable cities to buy a home

While house prices are down from the peaks they reached during the height of the pandemic, the average price point in the GTA–$1,156,167, according to April numbers from the Toronto Regional Real Estate Board–has many residents considering moving to more affordable cities. 

A recent Royal LePage survey of Canadians living in the greater regions of Toronto, Montreal and Vancouver indicated that 51 per cent of GTA respondents would consider buying a home somewhere more affordable, including Edmonton (19 per cent), Thunder Bay (15 per cent and St. John’s (14 per cent).

Interestingly, only two Ontario cities–Thunder Bay and Windsor-Essex–made the list of the top 15 most affordable municipalities in Canada, coming in at number one and 13, respectively. 

“The desire to own a home remains an important part of the desires of Canadians and newcomers to Canada. There are challenges with affordability, particularly with first-time buyers, but the desire to own property remains strong,” Karen Yolevski, COO of Royal LePage Real Estate Services, told insauga.com. 

“It’s not a dying dream, certainly not in Canada.” 

Yolevski says the drive to purchase a home and the growing popularity (and staying power) of remote work have people considering “flying until they qualify.” 

“One of the outcomes of COVID is that remote work or hybrid work seems to be here to stay for the foreseeable future and a lot of it is driven by people looking at other markets,” she says. 

“Now, you can fly to qualify for a mortgage.” 

The survey, which measured affordability based on the percentage of income required to service a monthly mortgage payment, identified the top five most affordable cities as Thunder Bay (aggregate price of $299,300 in the first quarter of the year), Saint John ($267,900), Red Deer, Alta. ($392,900), Trois-Rivières ($339,300) and Edmonton ($442,200). 

Those prices are in stark contrast to those found in the GTA. According to TRREB, the average house price in Toronto hit $1,152,200 last month. In Mississauga, the average price was $1,126,060 and in Milton, which was once considered an affordable alternative to the Peel region, the price point hit $1,095,865.

Even other GTA municipalities that have historically been considered more affordable are more costly, with house prices in Oshawa hitting $808,840 last month–well above the typical home price in Thunder Bay. 

Yolevski says that while Royal LePage hasn’t surveyed people who have actually made the move, StatsCan data shows that more and more people from Ontario are migrating to Alberta. 

The numbers bear that out. According to StatsCan, 37,379 Ontarians moved to the western province in 2022 and 2023 (estimates are based on CRA data)–up from about 12,903 migrations in 2018 and part of 2019. 

“These surveys fill out a little bit of the ‘why,’ Yolevski says. 

Whether the trend will continue, the current real estate environment does not suggest that prices in any market–let alone hotter ones–are set to drop significantly. 

“When interest rates [went up], we did see some decline in prices across the board, but prices are ticking back upwards. We are not anticipating a decrease because inflation is close to being under control and that will send interest rates back down,” she told insauga.com. 

Yolevski also says that the interest rate hike didn’t lead to a big increase in foreclosures, meaning the housing supply is still tight. 

“We didn’t see a big uptick in distress sales,” she says. 

“Canadians really tolerated the increases in interest rates quite well, and we still have low unemployment across the country. People are still working to pay mortgages and make ends meet. There aren’t enough houses on the market, which creates pressures on the supply we do have.” 

The report notes a disparity in intention to move among existing homeowners and those not yet in the market. According to the survey, 60 per cent of renters in the surveyed regions say they’d be willing to relocate, while 45 per cent of current homeowners say they would consider it. 

“Compared to existing homeowners who have already set down roots, we know that renters are more likely to move to be able to afford a home,” Yolevski said in the report, adding that moving is still top of mind for some people who currently own their home.  

“In today’s higher borrowing cost environment, where the price of everyday goods has increased in tandem with interest rates, homebuyers are considering buying a home in a more affordable community.” 

But despite sky-high prices, homes are still changing hands in some of Canada’s most expensive cities–and no, the homes aren’t all being scooped up by investors. 

“During a low interest rate environment, we saw people buy homes at prices we’d consider high, and that continued in higher interest rate environments. There are a number of people who can afford to buy based on employment and there are many people who have built up a lot of equity in their homes and are using that equity to make a move,” she says.

“Those who already own are in a different position than those who have never owned a home.”

Yolevski also says some homebuyers receive help with down payments and monthly payments from parents and grandparents. 

“An estimated $1 trillion will be passed along from boomers and Gen X to younger people in the coming years, so this will help people own homes,” she says. 

But while some people can tolerate the GTA price point, she says more needs to be done to cool the market and allow people to save to purchase a home.

“The best chance of success in helping people get in is creating more supply, and not only of one type of housing but of housing at various price points–starting right with rentals,” Yolevski says.  

“Rental accommodations are being built and that’s a good thing. Renters need affordable places to rent so they can save to become first-time homebuyers. We need more supply to allow us to absorb the demand for housing and we need to look at types of housing people can afford.”

Getting more supply on the market will also keep the more affordable markets from heating up too much. 

“While we applaud all levels of government for recognizing that affordability and supply are critical for consumers in Canada, we would encourage them to continue heeding the results of our research and considering some options to help lessen the burden and not continue to create cities and towns that see rapid price acceleration because of supply,” she says.