As homeownership continues to become more expensive and challenging for first-time buyers, many are now exploring different areas outside of big city centres as a way to enter the property market.
New research by Edmonton Homes compared and ranked the 25 most populated cities in Canada across three metrics: average annual income compared to house prices, property tax and electricity bills to reveal the most affordable city for first-time homeowners.
According to the research, first-time buyers in Ontario looking for more affordable alternatives outside of larger cities should consider Ottawa and London.
Ottawa ranked ninth on the list with an affordability score of 36. According to the study, homeowners in the city will see their median annual income of $121,790 account for 19.88% of house prices, which average $612,661. Property tax costs 4.39% of the median income, and with an average annual electricity bill of $1,560, residents spend 1.28% of their income on electricity.
London rounded out the top ten with a 28.3 affordability score. The average home price in London is $585,252, and the city’s median annual income is $94,070, equivalent to 16.07%. Meanwhile, 7.18% of the income is spent on property tax for a $500,000 house, and 7.18% of the city’s median income is spent on electricity all year round.
St. John’s took the top spot on the list with an affordability score of 58.8 points out of 70. Homeowners in St. John’s will see their median salary of $104,630 account for 37.31% of the average house prices in the city.
Property tax costs $3,650 for a $500,000 house, which is 3.49% of residents’ median salary. Homeowners are also set to pay an annual electricity bill of $1,656, equating to 1.58% of the average yearly income.
“Real estate in Canada has been a hot topic in recent years due to its rapid growth and high demand. The country's real estate market is considered one of the most stable in the world, with a diverse range of options for investors and homebuyers alike," said a spokesperson from Edmonton Homes.
“The study reveals where is most favourable for first-time buyers to start their search, and it highlights the difference in how much people need to embark on the adventure of home ownership depending on the city they are in.”
The research suggests that for first-time buyers looking for more affordable alternatives outside of larger cities, they should consider Ottawa and London, as two of the top ten affordable cities are located in Ontario.
Overall, the study highlights the varying levels of affordability for first-time homeowners across Canada and provides valuable insights for those looking to enter the property market.