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Finding homes on a map

Can buyers still find homes for under $200k? Yes and no.

Remember the days of $200,000 homes? It may seem like a distant memory, but believe it or not, they’re still available. You just need to know where to look.

But in the country’s most coveted regions, purchasing an affordable home is a more difficult task than ever. Post-pandemic home prices in Canada have ballooned 50% in just three years.

In April 2022, the average home price was $746,000 – up from $495,000 in April 2019, according to the Canadian Real Estate Association.

“The spillover effects of the pandemic are still felt today. Supply chain disruptions, like lack of construction materials and labour force, have led to skyrocketing housing demand and the highest inflation rate in 31 years,” says Alexandra Ciuntu of Point2, a Canadian company that studies real estate market trends.

“Instances of homebuyers being priced-out or, alternatively, willing to go way above the asking price to secure a deal are still making headlines, which speaks to the homebuyers’ plight in the midst of an ongoing housing crisis,” she added.

With these price jumps, it’s no surprise that housing affordability in Canada has sunk to its worst level in over three decades, according to RBC Economics and National Bank of Canada’s latest Housing Affordability Monitor.

But, the tide could soon start turning back in the other direction, with national home prices already down from February’s peak, particularly in markets around the Greater Toronto Area.

However, even with home price declines underway, we’re still a long way away from average home prices in the quarter-million-dollar range.

What if it were still possible to buy a home for $200,000?

At roughly a quarter of the median home price in Canada, $200,000 represents a reasonable benchmark for affordability, according to a report from Point2. For a first-time buyer at this price, the minimum 5% down payment for a default-insured mortgage would be just $10,000. Monthly mortgage payments at a 5-year fixed rate of 3.89% amortized over 25 years would be just over $1,000 monthly.

Just a few years ago, this wasn’t such a crazy prospect. Sure, it would have to be outside a major metropolis, like Toronto or Vancouver, but there was supply available in smaller, but still thriving communities.

Where can you still find these homes?

Point2 did the math and found that there are still cities in which a significant amount of listings are under $200,000.

There’s a catch, however. You’ll have to take your hunting to the Prairies, Atlantic Canada or Quebec, which have the largest concentration of affordable listings at that price point.

Unsurprisingly, out of Canada’s 50 largest and most expensive cities, all of which are in Ontario and British Columbia, only 12 have any listings available for under $200,000.

In fact, Vancouver, Burnaby, Toronto, Mississauga and Brampton have zero listings under $200,000, including condominium units.

Your best bet for finding a home under $200,000 is moving to Cape Breton, Nova Scotia, which has the highest share of homes for sale under $200,000 at 44% of listings. In fact, the median price is just slightly higher, at $213,129.

Next is Regina, Saskatchewan, with 37% of listings under $200,000 and a median price of $264,000. St. John, New Brunswick, comes in third, with 26.7% of listings under $200,000 and a median home price of $271,500.

Quebec City is also an option, although you would have to hunt for a bargain, as only 10% of listings are under $200,000, and the median home price is higher at $331,300.

And with remote work becoming increasingly attainable and plentiful, moving to a more affordable city and still keeping a job headquartered in a bigger city has become a realistic option for many.