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Homes for sale in the Caswell Hill neighbourhood in Saskatoon, on Aug. 19, 2020.

Kayle Neis/The Globe and Mail

Real estate is hot enough in the COVID-19 era that they’re feeling the heat in Saint John, N.B.

The average price of a house there jumped 9 per cent in July compared with a year earlier, a sign that the cost of buying a home is surging in cities both big and small. Home buyers are way more worried about missing out than they are about the as yet untallied effect of the pandemic on the economy, jobs, incomes and more.

The housing market looks like it entered a manic phase this summer, but let’s not fuss about economics and simply play it as it lies. You want a house and you worry that prices are running away from you – what to do?

Story continues below advertisement

Presenting seven housing markets across the country where a millennial or Gen Z buyer can buy an average-price home and still have money to save and enjoy: Lethbridge, Alta., Saskatoon, Winnipeg, St. John’s, and the New Brunswick trio of Saint John, Moncton and Fredericton. These cities were chosen because they appear on the Canadian Real Estate Association’s national price map and had average resale prices below $300,000 in July.

seven affordable cities for

first-time home buyers

The national average resale home price jumped

14.3 per cent to $571,471 in July. Here are seven

markets across the county where the average

price was below $300,000.

(In thousands of dollars)

$300

July 2019

July 2020

250

200

150

100

50

0

Lethbridge

Winnipeg

Moncton

St. John’s

Saint John

Saskatoon

Fredericton

JOHN SOPINSKI/THE GLOBE AND MAIL

SOURCE: Crea

seven affordable cities for

first-time home buyers

The national average resale home price jumped 14.3

per cent to $571,471 in July. Here are seven markets across

the county where the average price was below $300,000.

(In thousands of dollars)

$300

July 2019

July 2020

250

200

150

100

50

0

Lethbridge

Winnipeg

Moncton

St. John’s

Saskatoon

Fredericton

Saint John

JOHN SOPINSKI/THE GLOBE AND MAIL, SOURCE: Crea

seven affordable cities for first-time home buyers

The national average resale home price jumped 14.3 per cent to $571,471

in July. Here are seven markets across the county where the average price

was below $300,000. (In thousands of dollars)

$300

July 2019

July 2020

250

200

150

100

50

0

Lethbridge

Saskatoon

Winnipeg

Fredericton

Moncton

Saint John

St. John’s

JOHN SOPINSKI/THE GLOBE AND MAIL, SOURCE: Crea

The pandemic has changed attitudes toward life and work in ways that should open your mind like never before to a move to a small city. First, there’s the trend of remote work. It’s proven – Zoom, Skype, Microsoft Teams and Google Drive can bridge the distance between home and work. You no longer have to convince your employer this is the case.

Second, there’s a new open-mindedness to moving out of the city. In Toronto, for example, there’s been a shift in emphasis from the inner-city neighborhoods and their 416 area code to the suburban 905 zone. Throughout the country, there’s also been a growing interest in buying country homes, cottages, cabins and camps.

It’s a logical next step to expand your search for affordable cities in which to buy a home and raise a family. Create a list of locations and feed each name into Realtor.ca to see what’s available.

Canadian home sales, prices hit record high in July as low mortgage rates drive buyers into market

Rob Carrick: A reality check for people looking to cure their pandemic blues by buying a cottage

A hike in demand is changing the cottage country real estate business

The national average resale price in July was $571,471. Bought with a 10-per-cent down payment and a 2-per-cent five-year fixed rate mortgage amortized over 25 years, this house would cost $2,265 a month (including premiums for mortgage default insurance).

In the Greater Toronto Area, with an average price of $880,400 in July, a comparable mortgage would cost $3,489. In nearby Hamilton, where people have been moving for a modest break on Toronto prices, the average cost of $687,000 produces a monthly mortgage payment of $2,723.

The average July price in Saint John was all of $202,297, which means a mortgage payment of $802 a month using the same variables as above. A 20-per-cent down payment would be easily in reach, which means you save the cost of mortgage insurance. Also, you can splurge a bit. On Realtor.ca earlier in the week, there was a $375,000 Saint John-area home on two acres close to the water.

Story continues below advertisement

A few things you can do with the savings from living in a small community:

  • Save more: for emergencies to come, retirement and your children’s postsecondary education.
  • Spend more: Upgrades to your home are affordable in the context of fitting in with all your other financial priorities, rather than replacing some of them.
  • Travel more: If you need a big-city weekend, just do it.
  • Worry less: Small mortgage payments take the edge off if your income flow is affected by events like the pandemic.

Now for the downside of small-town real estate markets. Smaller markets typically appreciate less than larger ones, which means you’ll need to strategize if your goal in the future is to move back to a major city. It might take a big promotion, career shift, inheritance or lottery win to sell your small-town house and move back to an urban house, or even a condo.

I’m from Toronto – I lived there for 31 years before moving to Ottawa. I know Toronto residents may complain about traffic and congestion, but they’re not notably open to moving outside the city or its surrounding constellation of smaller communities.

But whether you live in Toronto, Vancouver or new entrants to the club of expensive cities such as Montreal or Ottawa, an opportunity has appeared out of nowhere to buy a house in an affordable city far away from your work. Along with rising prices, that’s another feature of real estate in the COVID-19 era.

Stay informed about your money. We have a newsletter from personal finance columnist Rob Carrick. Sign up today.

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