This year when we ran the numbers, we had a bit of a surprise. If you’re looking for real estate, it turns out that the best city to buy in is, of all places, Thunder Bay.
This northern Ontario city of just over 108,000 has been quietly and actively rebuilding after losing its prominence as an important stop on the trade route from western Canada to the eastern provinces. But the effort to rebuild has paid off. Thunder Bay is now a centre for medical, commercial and governmental departments that service all of northern Ontario.
Still, a city can’t grow if it can’t attract young talent. To do this, Thunder Bay has invested in its post-secondary schools, including the 2005 opening of the Northern Ontario School of Medicine, the first medical school to service the region. Not only did it attract and retain more medical personnel, the consistent influx of students propped up rental rates—with a 21% rental increase over the last five years—and kept the city’s vacancy rate relatively low.
Then there’s the affordability factor. The city’s average home price is just under $209,000 and the average household income is just over $78,000, so you have a population with plenty of disposable income and lots of cheap housing. Compare this with Toronto’s average income of almost $105,000 and average home price of just over $589,000—it doesn’t take a math genius to see that it takes almost twice as long to buy a home in Toronto as it does in Thunder Bay.
Rounding out the top five spots in this year’s ranking are two Alberta cities, plus two more from Ontario: Calgary, Barrie, Brantford and Edmonton. Calgary’s No. 2 position is based on past performance. But as we know, oil prices and Canada’s overall economy will have a strong impact on the city’s growth in the future, and the possible effects of the oil price drop were not factored into our calculations.
In cities that ranked near the bottom of our list, there were usually obvious reasons why they’re not great places to buy real estate now. Saint John, N.B., Gatineau, Que., and Moncton, N.B., are some of the cities that you can find in the bottom 10. All three have high rental vacancy rates, slowly appreciating rents and average home prices that are on the high side for their area.
In the middle of the pack you’ll find Toronto, which came in at a respectable No. 12 spot, and Vancouver, which ranked at No. 18. Both are prohibitively expensive, yet Canada’s two largest cities were able to pull in a decent ranking because of their low vacancy rates, high salaries, solid momentum and great employment options.