Quebec City or Edmonton? Who moves where to find affordable housing?


Real estate professionals use the old phrase “drive until you’re qualified” to give prospective home buyers in Canada’s largest cities an idea of ​​how to get into the real estate market: Essentially, it’s about getting out of the expensive urban areas and finding a more affordable home that you can afford.

But a report released Wednesday by Royal LePage shows that many first-time buyers now feel they may have to fly to qualify and are therefore moving out of the province to cheaper destinations.

The report examines 15 of Canada's more affordable housing markets in the first quarter of 2024 and also includes a survey on which cities are most attractive to Canadians currently living in the Greater Montreal, Toronto or Vancouver area. About 900 Canadians were surveyed via Leger's online platform from May 13 to 16.

In the ranking of the most affordable markets based on the percentage of monthly income required to service a typical mortgage payment on a representative home, Thunder Bay, Ontario, came in first. Saint John, NB, Red Deer, ALT, Trois-Rivières, QUE and Edmonton rounded out the top five in that order.

But while Thunder Bay was the most affordable, Edmonton was the top choice for current residents of the Greater Toronto and Vancouver areas considering a move. Alberta's capital was the most attractive and affordable destination for 19 per cent of respondents from those markets.

St. John's, NL and Thunder Bay completed the top three in both markets.

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Karen Yolevski, chief operating officer of Royal LePage, said it was “not too surprising” that Edmonton topped the list for Toronto and Vancouver residents, given Statistics Canada data showing an interprovincial migration trend from Ontario and BC to Alberta.

According to StatCan, Alberta's population increased by 202,324 people in 2023, the largest annual increase in the province's history. While most of the growth was due to international migration, Alberta also broke a national record for interprovincial migration last year, with a net increase of 55,107 people.

While Red Deer and Edmonton remain relatively affordable options for prospective Albertans, Yolevski points out that Calgary, once hailed as an affordable paradise for Canadians in recent years, was not among the 15 most easily accessible markets, according to Royal LePage.

While other real estate markets have seen prices fall in recent years amid the Federal Reserve Bank of Canada's wave of interest rate hikes, prices and activity in Calgary have largely continued to rise during the housing market correction due to the economic outlook and relative affordability, Yolevski explains.

The Royal LePage report shows that renters are more likely to move because they cannot afford housing (60 percent) than homeowners (45 percent).

According to an Ipsos poll conducted exclusively for Global News in April, 72 percent of non-homeowners have given up hope of ever owning a home, while four in five respondents said they now believe homeownership is the preserve of the rich.

Canadians are flying further afield in search of affordable housing, partly because they can find new job prospects where they land, and partly because the new openness provided by remote and hybrid work gives buyers more flexibility in choosing where to live, Yolevski says.

Canadians are currently considering “the possibility of flying to a whole new province or even further away within the same province for more variety and more cost savings,” she says.

According to the Royal-LePage report, a key factor in migration patterns is cost, but also lifestyle.

While 57 percent of respondents considering moving cited the lower cost of living as a key factor in their decision, others wanted a life away from the hectic city life. About 41 percent said they wanted to be closer to nature and live in less densely populated areas, while another 40 percent said they wanted a more relaxed pace of life. Respondents could select several options in the survey.

Culture was one of the reasons why homebuyers in the Greater Montreal area were most likely to stay in the province when looking for cheaper rents, according to Yolevski.

Montrealers surveyed for the report said they were most likely to move to Quebec City, followed by Sherbrooke and Trois-Rivières.

For Canadians living outside the province, options in Quebec have not been very popular. But Yolevski says the province's real estate market offers “great values,” especially for bilingual homebuyers looking for an investment opportunity or their first property.

“It’s a very viable option and a great opportunity to own a property at a price that’s more affordable for the average Canadian,” she says.

However, not all residents of relatively unaffordable housing are so eager to move. Respondents from Greater Vancouver were the most likely to want to stay put: 46 percent said they would not consider moving, compared to 40 percent of Montreal residents and 37 percent of Toronto residents.

This is despite the fact that not a single city from British Columbia made it into Royal LePage's top 15 more affordable markets. No city from Nova Scotia made the list either.

“We boil it down to the Vancouver lifestyle, the access to nature and the outdoor activities,” says Yolevski. “For some people, that's just too tempting to consider moving.”

– with files from Anne Gaviola and Caley Gibson of Global News