I found this article on the Remax Canada blog site and found it very interesting....for those looking to invest, here is a list where there may be some great opportunities!
At the start of the coronavirus pandemic, a lot of people thought that Canadian housing markets would suffer a steep crash, resulting in a considerable COVID-19 discount on real estate prices – particularly within the country’s urban centers. While there was a roughly six-week slump in some of the biggest real estate markets, many regions are already rebounding and reporting record activity in sales and prices. For now, the industry has defied the Canada Mortgage and Housing Corporation’s (CMHC) forecast of a large decline in prices.
Does this mean that homebuyers and real estate investors have missed an opportunity? Not quite.
Real estate agents have been making note of plenty of affordable housing markets from coast to coast, from cities to suburban communities. Whether your eyes are upon the Greater Toronto Area (GTA), the Maritimes, or the Prairies, you’ll be surprised to see just how many properties you can find to fit your budget, as long as you’re looking in the right places. This makes sense, given that a RE/MAX report released earlier this year found that 75% of Canadian markets are undervalued.
Most Affordable Housing Markets for Investors
#1 Fort McMurray, Alberta
Fort McMurray has been sensitive to movements in the energy sector. If the price of crude oil is rising, the housing market will pop – and vice versa. With the drop in energy prices, the Fort McMurray real estate market has also been on a downward trend this year. Fort McMurray Real Estate Board (FMREB) data found that real estate sales fell 13 per cent year-to-date in August, while the average sale price tumbled 8.4 per cent year-over-year to $361,971. The region’s unemployment rate and uncertainty have contributed to the decline in activity.
The Canadian Energy Research Institute (CERI) released a report last month detailing expectations for the growth of oil sands production over the next 19 years, especially as the demand for crude oil has already started to rebound following the market challenges earlier this year. Given these projections, smart investors will scoop up Fort McMurray real estate now, while prices and demand remain low, and will benefit as the energy sector regains momentum.
#2 Windsor, Ontario
One of the most compelling markets today has been Windsor, with a lot of investors looking to get in at the ground floor. But they may need to hurry, because sales activity and valuations are rising. According to the Windsor-Essex County Association of Realtors (WECAR), real estate sales surged 17.61 per cent in August from the same time a year ago. Average prices also rose 28 per cent last month to $430,810. While this market remains one of the most affordable in Canada, demand is on the rise, so it’s uncertain how long Windsor will remain on this list.
#3 Calgary, Alberta
Calgary has been hard hit by the coronavirus-induced recession. The economic downturn spilled over into the city’s real estate market. But new data suggests that the housing sector could be recovering. According to the Calgary Real Estate Board (CREB), the residential benchmark price in August was $420,800, down only about one per cent from the same time a year ago. While CREB figures also show a 13 per cent decline in sales activity from last year, this trend is projected to slowly reverse into 2021 as local employment conditions improve.
Saskatchewan is a province that is always on the cusp of breaking out, but never quite rivals that of Ontario, Quebec or British Columbia. If the COVID-19 outbreak has taught us anything, it’s that everything has been turned upside down, including the Saskatchewan real estate market.
According to the Saskatchewan Realtors Association (SRA), the real estate market across the province continued to strengthen in August. Sales were up 46 per cent year-over-year, while the median sale price increased seven per cent. Housing supply is still down in most markets, and local experts say that there is a lot of housing demand province-wide.
“Although things are starting to ‘slow down’ compared to earlier in the year, the market is in line with historical trends—and we still see generally strong performance,” the SRA said in a news release.
#5 Durham Region
The Durham Region, which is comprised of Whitby, Oshawa, Ajax, Uxbridge and Clarington, has attracted a lot of people from Toronto and Hamilton, especially as these cities have become too expensive for many homebuyers. August continued to be a big month for the regional municipality in Southern Ontario, based on the latest figures from the Durham Region Association of Realtors (DRAR).
In August, the average housing price in Durham Region reached $734,136, a 19.5 percent boost compared to the same time last year. The number of new listings surged 19 percent year-over-year to 1,839 in August.
While average prices remain lower than the west end of the GTA, and with advocacy to create new supply in the region, the area is a hotbed for eager real estate investors.
Why Invest in Canadian Housing Markets?
Many industry observers recommend against trying to time the market, because of the overall uncertainty surrounding the coronavirus pandemic, the economy and a multitude of other factors. That said, if you choose to invest in the Canadian real estate market, there are many local markets that are ripe for the picking.
One of the biggest benefits of investing in housing right now is that interest rates are lower than they have ever been. The Bank of Canada (BoC) slashed its benchmark interest rate, and the central bank lowered its five-year mortgage for the second to below five per cent. BoC Governor Tiff Macklem has indicated that the institution will refrain from raising rates anytime soon, and possibly not until 2023. As a result, credit will be cheap, which makes borrowing inexpensive.
Another reason to invest: pent-up consumer demand still appears to be fierce. All over the country, housing markets are witnessing huge growth in sales activity and prices. The delayed spring market started in May and the typically quiet summer season became a buying frenzy. Could the same upward trend unfold in the fall?
The RE/MAX Fall Market Outlook Report suggests that Canadian housing markets will remain active amid pent-up demand and low inventory levels. And, according to the report, the shift in demand will lean toward suburban and rural homes due to evolving work and life dynamics.
Whether you set your sights upon urban centres or cottage country real estate– there are plenty of affordable Canadian housing markets for investors to consider as autumn approaches.