Interest rate hikes in Canada Real estate market conditions are changing across the country. While in some major markets, like Calgary, real estate is still in high demand and comparatively affordable, in others, like Toronto, real estate transactions are projected to hit a 20 year low. Nationally, home prices fell by 1.2% on a monthly basis to $741,400 in September. Though declining, prices are not nearly as low as they were five years ago. As the pandemic and rate hikes have warped the landscape over the last few years, many cities have surged in price, making buying a home vastly more difficult. But as the prices drop slightly, potential home buyers may feel like there’s a small chance to get into the market.
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To find out how affordable townhouses are in Canada, and what kind of down payment you’d have to pay compared to five years ago, Zoocasa calculated the difference in the required down payment a buyer would need to purchase a townhouse at the benchmark price in 19 cities across Canada in September 2023 and September 2018.
Benchmark home prices were sourced from the Canadian Real Estate Association (CREA). Minimum down payment amounts were calculated based on 5% of the purchase price for homes valued at $500,000 and under, 10% for the portions of home prices between $500,001 – $999,999, and 20% for homes priced at $1 million and over.
One Major Market Stands Out With a Six-Figure Increase
Out of the cities analyzed, the majority of these markets experienced increases of less than $20,000 in their required down payments. Six cities had down payment increases of less than $5,000, showing how varied price growth can be in Canada’s real estate market.
Regina had the smallest change in required down payment cost, as the home price changed from $223,400 in September 2018 to $229,300 in September 2023. The required down payment now is $11,465, an increase of just $295 in five years. Edmonton is the only other city where required down payments have increased by less than $1,000. Home prices in the city have increased from $233,400 to $241,900, meaning the down payment has increased by $415 to $12,095.
The good news for potential buyers is that only one city we covered has seen a major jump in minimum down payment. The down payment required in Greater Vancouver has increased by $162,730, with home buyers required to pay $219,680 for a home at the benchmark price. The increase here is largely due to the 20% down payment requirement when the home price breaches the $1,000,000 mark, which happened in December 2021 in Vancouver.
Aside from Vancouver, there are just three cities on our list where the down payment required is over $50,000. In Victoria, the benchmark home price of $785,600 requires a down payment of $53,560, a five-year increase of $24,130. Fraser Valley’s home price of $848,600 requires a down payment of $59,860, up $26,400 from September 2018, while in Toronto you’d pay $59,180 on a townhouse at the benchmark price of $841,800, $29,250 more than you would have paid five years ago. The only other cities where required down payments have increased by over $20,000 are Kitchener-Waterloo and Hamilton-Burlington, where they’ve increased by $20,795 and $25,825 res
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