When Dave Snively began house-hunting about a year ago, he was looking for an updated home, a nice neighbourhood and plenty of outdoor activities nearby. But most importantly, he was looking for something inexpensive.
"I'm a commissioned salesperson, so some weeks I make a lot of money and some weeks I don't. My wife's at home with one child and another on the way, so there's not a lot of money coming in," he said. "It's easier to save money when you spend less on a mortgage."
Mr. Snively covers a sales territory in southern Ontario from Niagara Falls to Woodstock to Milton, so he could have chosen anywhere in between. He decided on Welland, where he was able to purchase a century-old, four-bedroom detached home for about $160,000 in 2010.
"I can pre-pay my mortgage an extra 20 per cent a month with my property taxes in and I'm still under $800 per month," he said. "There's virtually no concern at all about meeting the mortgage payments. We could have afforded more, but it's nice to not have to worry about it."
Welland, about two hours from Toronto, was listed in last month's Coldwell Banker Home Listing Report as one of the five most affordable places to buy a four-bedroom, two-bathroom home in Canada, with an average listing price of $196,321.
No. 1 on the list, which is based on 70 cities where Coldwell does business, was Windsor, Ont., with an average price of $144,460. Amherst, N.S. was second at $194,700; Welland was third; Fort Erie, Ont., was fourth at $215,236, and St. Catharines, Ont. rounded out the top five at $220,883.
John Geha, president of Coldwell Banker Canada, said cities where prices are low can be attractive to young families in particular.
"You don't want to be house poor. You want to be able to enjoy your life and not sit in the home and be afraid," he said. "Because our markets are stable here and the economy is still strong, as your financial condition strengthens you can make a decision to buy a more expensive home later. But if you put yourself in a situation where you're just stuck in the home, it's going to affect you long-term."
Mr. Geha says growth in more rural areas is also due to improving transportation options and the growth of the mobile workplace. "You can look at your decision about where to buy a home based not on where you work, but what you want," he said.
As a restaurant manager living in Toronto, Jeremy Tyrrell was certain he and his family would be renters for life. "We just resigned ourselves to the fact that we would never own a house."
Then he was transferred to Windsor. The family rented at first, but six years ago he saw a home for sale in the historic Walkerville neighbourhood and, on a whim, decided to find out the price. That house wasn't right for them, but the real-estate agent did find a three-bedroom dream home in the same neighbourhood for just $103,900. Unexpectedly, the Tyrrells were homeowners.
"My sister-in-law lives in Leaside [in Toronto]and is looking at million-dollar homes that I don't think are all that much nicer than ours," he said. "We watch those Property Virgins-type shows on TV and just shake our heads in disbelief that people are buying 600-square-foot condos for three or four times what we paid for our house."
Mr. Tyrrell said he's been pleased with the "small town" feeling of Windsor, plus the fact that Detroit is right across the river for hockey games or theatre. Now working in sales for a Windsor hotel and casino, Mr. Tyrrell said his pay is comparable to his peers' in Toronto - but there is a trade-off.
"The trade-off is in growth potential," he said. "Because for me to move up [in my career]from where I am now, I'd have to leave Windsor."
Though a $150,000 four-bedroom house seems like a steal, home buyers need to be sure they don't end up in a house that will be unsellable a few years down the road, says Don R. Campbell, a real-estate analyst and author of the Real Estate Investing in Canada series. Many of the lower-priced cities on the list have been hard hit by the loss of manufacturing jobs in the country, and buyers looking for a bargain home need to take certain factors into account, Mr. Campbell said.
"Is the city creating jobs and attracting people to move there - or is the opposite happening? If population and jobs are shrinking, it's not a good sign. If it's growing, is it a good long-term place to buy? Can I find a property that I want to keep for longer than I expect in case I have trouble selling it?"
People should be wary of reports like Coldwell Banker's because they don't give the full picture when it comes to deciding on a place to live, he said.
"This report covers average prices and details, which can be of very little help for a home buyer other than to have a concept of where their target market fits as a comparison to the rest of Canada, he said. It won't help them decide if their target house is under- or over-priced, or indicate how much they will need to pay in a certain area.
The Coldwell Banker report lists the average Toronto price as $378,913, a number that is lower because it encompasses the entire GTA. Vancouver's whopping $1,475,546 (the highest in Canada) is skewed by the large number of $3-million-plus properties for sale on the city's west side.
Some of the cities and towns Mr. Campbell sees as hot, with prices that are currently low but likely to start going up, are Halifax, Hamilton, Cambridge, Orillia, Winnipeg, Red Deer, Edmonton, Maple Ridge, Surrey and Cranbrook.
As for Mr. Snively, he is generally happy with the lifestyle Welland has to offer, though there are some negatives - the downtown neighbourhood he's in has "good and bad" sections, and the city lacks a wide selection of good restaurants.
But he's optimistic that Welland is trying hard to attract new people, including a project beginning next month to widen Highway 406 to four lanes.
"We know there's a little risk in buying in a place that's depressed economically, but we're confident that it's at the bottom and can only get better," he said. "If not, I suppose it might be difficult to sell the house. So far, so good, though."
Special to The Globe and Mail
Shelley White