Ontario, Canada, is a highly preferred destination for homebuyers and real estate investors due to its stable economy, diverse culture, urban amenities and promising growth potential. It is also a top choice for newcomers, as half of the new Canadian permanent residents chose to live in Ontario in 2022.
In this blog, we delve into the dynamic housing market of Ontario, uncovering the factors that make it an enticing prospect for both homebuyers and real estate investors. From vibrant metros to promising towns, we explore the housing landscape of Real Estate Canada‘s most popular province.
Affordable housing is broadly defined as accommodation priced within the budgets of buyers with moderate incomes while they still have the financial capacity to cover other essential expenses.
A combination of factors, including the price of homes or rental units, the availability of financing options, and the ratio of housing costs to income, determine affordable housing. In addition, affordability can vary from one location to another, as housing prices and income levels differ across regions. Government policies also play a crucial role, such as providing subsidies, implementing rent control measures, or promoting the construction of affordable housing units.
Finding affordable housing is a priority for homebuyers or tenants in Ontario. Fortunately, with the wide range of urban centres, and suburban and rural towns, the province offers several options for those seeking budget-friendly housing.
Toronto, Ontario’s capital and the biggest metropolis in Canada, has a bustling real estate market with high demand and potential for growth. The city’s vibrant culture and international appeal make it a prime location for residential and commercial investments.
While homes for sale in Toronto’s downtown have astronomical property values, there are pockets within the city where more affordable housing can be found. Areas such as Scarborough, North York, and Etobicoke offer relatively lower housing prices compared to downtown Toronto. Condominiums and townhouses may present more affordable options for buyers looking to settle in the city.
Not only do these areas provide more affordable housing options, but they also offer convenient transportation links that make commuting to and from Toronto a feasible and time-efficient choice.
Located just west of Toronto, Mississauga is a vibrant city known for its diverse community, excellent amenities, and a strong economy. A thriving business sector and a well-developed infrastructure attract investors looking for Mississauga homes for sale. Mississauga is approximately 30 kilometres from downtown Toronto and is easily commutable via public transit, specifically GO Transit train and bus services.
Mississauga offers a variety of housing options, from condominiums and townhouses to detached homes. Some areas of Mississauga may have higher prices, but there are affordable pockets to explore, especially in the northern and western parts of the city.
Brampton offers a growing population and multiple housing options, making it an ideal choice for a first-time home buyer. Situated northwest of Toronto, Brampton is another city that benefits from the easy accessibility to Toronto provided by GO Transit.
Brampton homes for sale offer a range of styles, including townhouses, semi-detached, and detached homes. The city boasts a diverse population, cultural events, and recreational amenities. Specific neighbourhoods in Brampton, such as Mount Pleasant, Mayfield Village, and Heart Lake, offer relatively more affordable housing options while providing access to essential services and transportation links.
Moving away from the Greater Toronto Area, Kitchener is a city located west of Toronto, experiencing rapid growth in recent years. About 105 kilometres from downtown Toronto, the city is part of the thriving Waterloo Region and has a vibrant startup ecosystem, making it a hotspot for investors.
Kitchener offers a more affordable housing market compared to its neighbouring cities. Buying a house for sale in Kitchener can be an attractive investment option without compromising quality of life. The city provides an array of amenities, including parks, cultural events, and a thriving tech industry.
Situated in the picturesque countryside, about 50 kilometres northwest of Toronto, Caledon is known for its natural beauty and peaceful surroundings. While Caledon is primarily rural, it offers various housing options, including detached homes on larger lots.
The town’s charm, coupled with relatively more affordable prices compared to urban centers, makes buying a house for sale in Caledon an appealing choice for those looking for a quieter lifestyle without venturing too far from the city. While the town primarily caters to residents seeking a more peaceful lifestyle, commuting options to Toronto are available.
Average Home Prices in Ontario – May 2023
Home prices in Ontario have shown some fluctuations recently. In May 2023, the average home price in Ontario decreased by 1% to $928,897 compared to the previous year. Despite this slight decline, it is worth noting that home prices in Ontario have been steadily increasing over the past few months, with a 2% rise month-over-month. Since the beginning of the year, home prices have seen a significant 16% increase, as sales activity in these areas remains strong.
The average home price within the Greater Toronto Area (GTA) was $1,196,101, reflecting a 1% decrease year-over-year. Home prices in the City of Toronto experienced a 3% decrease to $1,197,021.
Mississauga saw a slight 1% decrease, with an average price of $1,140,328, while Brampton experienced a 3% decrease, with an average price of $1,111,067. In May 2023, the median sales price in Caledon stood at $1,288,500, while the average sale price for residential properties in Kitchener-Waterloo Region was $821,828.
Forecast for the Coming Months
Ontario’s housing market is expected to undergo further changes in the coming months of 2023.
Several factors will shape the direction of home prices in the province. The return of immigration to normal levels, along with international students, will increase housing demand. However, the limited housing inventory and increased buyer activity may drive prices upward.
Government policies, such as the ban on foreign buyers and mortgage stress test changes, could impact demand and affordability. The overall economic recovery will also play a role in buyer confidence and market activity.
A potential pause in interest rates by the Bank of Canada could stimulate demand and make borrowing more affordable.
Based on predictions by central Canadian banks, Ontario home prices are forecasted to decrease in 2023 and then show modest increases in 2024. RBC predicts a 13.7% decrease in 2023, followed by a 2.9% increase in 2024.
Ontario Government Initiatives
The Ontario government has taken significant steps to promote affordable housing in the province. The passage of Bill 97, known as the Helping Homebuyers, Protecting Tenants Act, aims to create more homeowners, protect renters, and encourage quality rental supply. The government is streamlining land-use planning policies, expediting approvals at the Landlord and Tenant Board, and promoting intensification around major transit stations.
They are also addressing exclusionary zoning and strengthening protections for renters through increased fines for rule-breaking landlords and support for tenants during hardships.
In the search for affordable housing near Toronto, consider smaller cities and towns like Mississauga, Brampton, Kitchener, and Caledon for viable options. These locations offer a range of housing choices to suit diverse preferences and budgets, allowing singles and families to strike a balance between affordability, amenities, and location.
When exploring Ontario’s housing market, it’s essential to consider proximity to services, transportation options, and personal preferences. By conducting thorough research, working with a trusted real estate agent, and exploring different neighbourhoods, prospective buyers can find their ideal home in Ontario without compromising their budget.
At Save Max, we are committed to assisting first-time home buyers and investors navigate the dynamic Ontario market and find the right property for their needs.