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Single-storey homes are drawing buyers as home prices climb across Canada. (John Lehmann/The Globe and Mail)
Single-storey homes are drawing buyers as home prices climb across Canada. (John Lehmann/The Globe and Mail)

HOME OWNERSHIP STRATEGIES

Home buyers turn to less pricey bungalows in hot markets Add to ...

When Parambir Bhangu and wife Tracey went searching for a new house to replace their awkwardly designed townhome in Vancouver’s Kitsilano neighbourhood a couple of years ago, they drew up a homebuyer’s wish list.

Their next place had to be renovated and near good schools, feel private, be within walking distance of shops, and in the ballpark of an affordable $1.2-million. (Put down your coffee, dear reader in Thessalon, Ont. Don’t choke.) By Vancouver standards, they wanted the moon.

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After checking out numerous houses that didn’t quite fit the bill, they finally stumbled across a four-bedroom North Vancouver property that had everything going for it, except one thing: a second floor.

“In all other ways it was perfect, but the property was not exactly what we were looking for. It was a bungalow – a rancher – and all on one level,” says Mr. Bhangu now.

After weighing the pros and cons of one-floor living, the couple moved in with their toddler son a little over a year ago.

Smart move? Probably. Less pricey bungalows, and smaller post-war one-and-a-half storey homes, are the last, best hope for many homebuyers who prefer to eschew condo living in exchange for the detached-house dream. No easy feat considering the average housing price was a disheartening $413,215 in June, 2014, up from $386,700 the year before, according to the Canadian Real Estate Association.

Julie Miller, the real estate agent with Prudential Sussex Realty in West Vancouver, B.C., who helped the Bhangus find their bungalow, says a lower price point is only one of the benefits of going single-storey. For starters, by buying a smaller property or one with less curb appeal, younger people are more likely to get into the market in a neighbourhood they covet. Then, once their salary increases and they build up equity in their home, they have the option to add extra space as the family grows.

It’s about thinking longer term – and working with the house you’ve got.

“You’ll often see a rancher at 1,600 square feet. You can open up the ceiling to get a feeling of openness. That’s not something you can do in a standard multi-storey home,” she says.

And although urban planners might detest their contribution to suburban sprawl, bungalows tend to sit on larger parcels of land. They need the space to spread out. (One of the reasons today’s builders tend to build up, not out is high land prices.) More land equals more flexibility than multi-level homes for additions.

Mr. Bhangu’s own large backyard means he may some day build a free-standing building back there to house his home office, he says. No plans yet, but it’s an option.

One-level living also appeals to an aging population, although not simply because there are no stairs. Ms. Miller explains that bungalows tend to have fewer supporting walls so the space can be renovated to become even more open and accessible.

By buying a bungalow, downsizing baby boomers get to stay in a house and avoid condo living, if apartment-style buildings, party rooms, hot tubs and maintenance fees aren’t their thing. Suzanne Ethier, a real estate agent with Keller Williams Golden Triangle Realty in Kitchener, Ont., says many of her retired clients aren’t necessarily looking for a step down, but a lateral move to accommodate their new stage of life.

“They don’t want to sacrifice,” she says. “They don’t want to have to give up their driveway, garage and gardening in the backyard.”

Brennan Waters, contractor and owner of Oakwaters Construction Ltd., based in Everton, Ont., who serves residential clients in and around Toronto, says he’s been brought in to renovate bungalows, whether it’s to add an extra storey or just redo a tired bathroom. In other cases, clients want to renovate an attic to convert it to office space.

For some, it makes sense to buy a cheaper home and add an extra floor later when they need it, Mr. Waters says. The cost of moving instead, from paying movers to shelling out for real estate commissions, could be used to renovate a basement.

“They have more cash to play with and create what they want,” he explains.

What they may want is to turn their basement into a rentable suite to make some extra money. Bungalows, more often than typical multi-level homes with smaller footprints, are ripe for rental renos. But Judith Cane, an Ottawa money coach with Money Coaches Canada, cautions that building a new basement apartment isn’t as easy – or as cheap – as some HGTV shows make it out to be.

Not only do basement apartments generally need two routes of escape in case of fire (so be prepared to pay for a window large enough for a human to shimmy through), unlike the United States, which gives homeowners time to renovate before being required to paying off the mortgage, Canadian landlords enjoy no such time luxury, she says. The longer it takes to renovate, the longer the owner is carrying the mortgage without tenants.

“If something goes wrong with your renovations – say, you discover huge foundation issues – you could run into a huge financial risk,” she says.

The solution? Hire not just a property inspector, but other experts and contractors too before signing mortgage papers. For instance, an electrician can tell you whether you might find trouble with outdated electrical in the basement – and how much it would cost to fix.

Ms. Cane, who recently bought a bungalow herself, says she also has to give downsizing baby boomers a reality check about their plans to buy a one-level home to save money.

“It’s not like 15 years ago when you could definitely count on getting cash out of your house. You can’t any more,” she says.

Ms. Ethier agrees that bungalows aren’t necessarily a better deal than other homes if they’re in a hot neighbourhood. In fact, bungalows are shaping up to be a good investment for those who want to be sure their property won’t languish on the market for weeks or months when they eventually sell.

“They’re in high demand and go fast,” she says. “A lot of people are looking at bungalows for a lot of different reasons.”

Three things to look out for when bungalow buying

1. Get your hands on zoning laws in the area to find out how much flexibility you have for additions and renovations down the road.

2. How many closets does the bungalow have if the property doesn’t come with a basement? What will you do with your bikes, holiday decorations and camping gear?

3. Never buy a bungalow between two multi-level homes. They’ll block your sunlight.

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