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real estate

John Woods

A two-level home with a four-car garage and an oceanfront view, or a 1,070-square-foot loft? Either British Columbia residence can be bought for $600,000, proving the adage that when it comes to real estate it's all about location, location, location.

The house that $600,000 will buy from coast to coast is as variable as the weather. House prices depend not only on the property and residence, but on conditions in the local market and, obviously, location.

For many homeowners, squeezing every dollar out of the investment they are making in their house has never been more important. Canadians are spending a greater proportion of their income on their homes than they historically have, and housing is expected to take up an even bigger chunk of families' budgets once interest rates start rising.

While some buyers aren't able to choose where to live based on home prices, they might be tempted. Housing affordability actually improved in most provinces during the final quarter of 2010 (the last period with solid data), but a standard two-storey house became less affordable in Ontario and Quebec, and condos became less affordable in Quebec and the Atlantic region, according to RBC Economics.

Indeed, Quebec and Saskatchewan are becoming more expensive, although they remain below the national average. Alberta and Manitoba have been a bit more affordable than normal.

Borrowing costs, including mortgages, are expected to climb over the next two years, putting a damper on price appreciation. "The era of rapid home-price appreciation of the past 10 years has likely run its course overall in Canada, and we believe that we have entered a period of very modest increases," said a recent RBC Economics research report.

A general rule of thumb is that home buyers should keep their mortgage below four and a half or five times their gross family income, said Peter Majthenyi, a mortgage planner at Mortgage Architects in Toronto. So where do you get the best bang for your buck?

Most experts agree on one thing: not Vancouver. "We've never been in the camp that says there's a housing bubble in Canada, but if we were to pick one market that we want to see scrutinized more closely it would be that one," said Robert Hogue, a senior economist at RBC.

Toronto would be next on the list, but the situation there is not nearly as worrisome, he added.

An unscientific country-wide search on the Canadian Real Estate Association's multiple listing service of houses that are listed for $600,000 tells the story.

That's the price tag on a 1,070-square-foot, one-bedroom, one-bathroom loft condominium on Vancouver's Beach Avenue that has a partial water view. It's also the listed price of a two-bedroom, one-bathroom, 793-square-foot condo in Vancouver's west end, near Robson Square. [*MLS # V879838, 1028 Barclay St, Vancouver BC, V6E0B1]/note>

"Vancouver has always been the most expensive market in the country, and it continues to be the most expensive, not only in terms of housing prices but in terms of mortgages," said Jim Murphy, chief executive officer of the Canadian Association of Accredited Mortgage Professionals.

With that same $600,000 you could hop across the Strait of Georgia to Parksville, on Vancouver Island, where you could buy a 3,008-square-foot, three-bedroom, four-bathroom house with an ocean view that sits on 9,148 square feet of land. [*note: for photos this property is MLS # 314632, 1730 Admiral Tryon Blvd, Parksville BC, V9P 1Y1]/note>

What about the country's most populous city? For $600,000 you could buy a three-bedroom, three-bathroom townhouse condominium in Toronto's Cabbagetown, with walkouts on three levels. [*MLS # C2083879, 41 Spruce Street Toronto M5A 2H8]/note> If you pony up an extra $900, you could get a one-bedroom, one-bathroom, 826-square-foot condo on King Street West, in the heart of downtown. [MLS# C2052205, 560 King St. West M5V 1M3]/note>

"The Toronto-area market sustained a rebound in activity in the latter part of 2010, following a steep decline in the spring and early summer from unsustainably high levels last winter," the RBC Economics report noted.

Take your $600,000 to Hants Border, N.S., and it will buy you a three-bedroom, three-bathroom, 2,824-square-foot home on an acre of land with water views that change along with the Fundy tides. [*this is MLS # 55224646, 162 Avon St., Hants Border, NS, B0P 1P0]/note> If you're looking for a recreational property, $600,000 is the price of a three-bedroom, three-bathroom ski chalet on roughly an acre of land in Saint-Sauveur, Que. [MLS # X2047377]/note>

Or you could head a bit west of London, Ont., to Komoka, a town best known as a railway crossing, and your money will buy a four-bedroom, three-bathroom clay brick house on 2.74 acres of land. [MLS # 471474]/note> Three hours east, in the scenic town of Niagara-on-the-Lake, the same amount is enough for a four-bedroom, three-bathroom, 2,300-square-foot house that's been featured on garden tours and dates back to the 1800s. [MLS # 20139008, 86 Gage Street]/note>

In Calgary, $600,482 will secure a two-bedroom, two-bathroom 1,364-square-foot, one-year-old two-storey condo in Eau Claire, near the Bow River. [MLS # C3459752, 737 2 Avenue South West Eau Claire Calgary T2P 0E4]/note> Housing industry experts say Calgary has become one of the country's more rocky markets, where prices have fluctuated. "There was a bit of a downturn there, but prices are coming back," Mr. Murphy said.

Indeed, RBC Economics believes that the prolonged slump that has afflicted Calgary since 2007 is drawing to an end. While home prices continued to weaken in the fourth quarter, resales have rebounded. But the weakening prices have helped bring housing in the city to its most affordable level in nearly six years.

"We believe that attractive affordability will support further increases in demand as the local economy picks up steam in the year ahead," the report said.

If so, that two-storey condo might not be going for $600,482 for long.