A recent study has identified which major Canadian cities present the most cost-effective opportunities for potential homebuyers considering a move from the United States.
In the wake of Donald Trump’s recent electoral success, there has been a notable increase in interest among Americans in relocating to Canada, as evidenced by a significant rise in Google searches for terms such as ‘Move to Canada’ and ‘Canada work visa.’ This trend indicates a heightened interest among U.S. citizens in exploring relocation possibilities.
The research evaluated rental affordability and the duration necessary to accumulate a home deposit. Analysts utilized average one-bedroom rental prices and annual income statistics from Statistics Canada to determine the proportion of income allocated to rent.
For assessing home prices, the study relied on data from the Canadian Real Estate Association (CREA) to estimate the time required to save for a 10% deposit on an average-priced home. The researchers employed the 50-30-20 budgeting rule to calculate monthly savings and ranked the cities based on the time needed to save.
Quebec City stands out as the premier destination for potential homebuyers who wish to rent while accumulating savings for a future home. The typical monthly rent for a one-bedroom apartment is approximately $911 CAD, contrasted with an average annual salary of $50,500.
This results in residents allocating merely 21.65% of their yearly income towards rent, rendering it an optimal location for financial savings. This figure is 37% lower than the national average, where Canadians typically devote 34.5% of their annual income to rental expenses.
Montreal is identified as the second most favorable city for those renting while planning to purchase a home. The average monthly rent for a one-bedroom unit is $960, with an average annual income of $43,800. Consequently, tenants allocate 26.3% of their income to rent.
St. John’s, NL is recognized as the third most advantageous city for renting while saving for home ownership. The average monthly rent stands at $904, and with an annual income of $39,100, residents spend only 27.74% of their earnings on a one-bedroom apartment.
Toronto ranks as the least favorable major city for potential homebuyers seeking rental options, with an average monthly rent for a one-bedroom apartment set at $1,691. Considering that the average annual income for residents in Toronto is $41,800, this results in renters allocating 48.55% of their income towards housing costs, which significantly limits their ability to save.
Vancouver follows closely as the second least favorable city for renting while attempting to save for a home. The average cost for a one-bedroom rental is $1,697. With an average annual income of $44,200, residents in Vancouver dedicate 46.07% of their earnings to rent.
Halifax, Nova Scotia, is identified as the third least affordable city for renters, with an average monthly rent of $1,322 for a one-bedroom unit. Given the average annual income of $38,700, tenants in Halifax spend 40.99% of their income on rent.
It is essential to assess not only the most and least favorable cities for renting while saving for a home but also the duration required to accumulate a home deposit in each major city.
Utilizing the 50-30-20 budgeting principle based on monthly income, researchers have calculated the time prospective home buyers will need to save for a 10% deposit on a property.
The findings indicate that Quebec City stands out as the most advantageous location for prospective home buyers. It not only features the most economical rental prices but also enables individuals to save for a home deposit in the shortest time frame.
With an average annual income of $50,500 and an average home price of $343,200, allocating 20% of income monthly results in a savings period of approximately 40.77 months, which is just under three and a half years, to secure a 10% deposit.
Regina, Saskatchewan, ranks as the second most favorable city for accumulating a home deposit. With an average annual income of $43,900 and a home price of $310,223, it takes around 42.39 months, or roughly three years and six months, to save for a 10% deposit.
Winnipeg, Manitoba, is positioned third in terms of the quickest time required to save for a down payment. Given an average annual income of $42,300 and an average home price of $346,654, potential homeowners will need approximately 49.17 months, which translates to just over four years, to save 20% as a down payment.
Vancouver ranks as the least favorable major Canadian city for home buyers, characterized by exorbitant rental prices and the most prolonged duration required to accumulate a 10% home deposit.
With an average annual income of $44,200 and a typical home price of $1,193,808, it would take approximately 162.05 months—equivalent to around 13 years and six months—to save for a deposit, assuming that 20% of income is allocated each month. This duration is nearly a decade longer than that required in Quebec City.
Toronto follows as the city with the second-longest duration needed to save for a home deposit. With an average income of $41,800 and an average home price of $1,104,592, residents would need about 158.55 months to save for a 10% deposit.
This translates to roughly 13 years and two months, provided that individuals save 20% of their monthly earnings.
The Lower B.C. Mainland ranks third among major cities with the slowest home deposit saving time. With an average annual income of $43,900 and an average home price of $1,128,008, prospective home buyers would require 154.16 months to save for a deposit.
This duration equates to approximately 12 years and ten months if future homeowners set aside 20% of their monthly income.