Owning a million dollar home means very different things depending on where you live in Canada.
Royal Lepage released a report Thursday analyzing $1 million properties in Canada (homes priced between $950,000 and $1.05 million) as of December 2023. They found that the average price of $1 million buys a home with 1,760 square feet of living space. That's essentially unchanged from last December, when you could get a 1,763-square-foot home for $1 million.
But how far that $1 million lasts depends on where you want to buy a home. Prospective buyers can get the most for their money in Edmonton. $1 million gets you an average of 2,675 square feet of land. In Halifax, $1 million buys you an average 2,543 square foot home. At the other end of the affordable spectrum, Vancouver has the lowest average square footage, with $1 million getting you 900 square feet. In Toronto, $1 million will get you an average of 1,218 square feet.
“Years ago, a $1 million budget could buy enough square footage and access to popular neighborhoods in almost any market. But over time, the purchasing power of $1 million increased between cities. We now know that there are even more significant differences between the two,” Royal Lepage Chief Operating Officer Karen Yolevski said in a news release.
“These days, this budget can buy you a luxury single-family home in one location and a two-bedroom condo in another.”
Still, according to a Royal Lepage survey conducted by Léger, nearly two-thirds (64%) of Canadians believe that in today's real estate market, a reasonable budget of $1 million is enough to purchase a home that meets their household needs. However, 22% of Canadians believe that $1 million is “not enough.” (14% of respondents said they didn't know or didn't want to answer.) The number of respondents who think $1 million is “not enough” is high in Canada, home to the hottest housing market. Increases occurred in Ontario and British Columbia. In Ontario, 31 per cent of respondents said a $1 million budget was not enough to meet their household's needs, and in British Columbia, 45 per cent said it was insufficient.
On the national average, you can still buy a similarly sized home for $1 million, but rising interest rates will make it harder to buy such a home in 2023, even as prices remain flat. Monthly payments are rising.
However, the situation is expected to change in 2024, with economists widely expecting the central bank to start cutting interest rates later this year. Mr. Jolevski said he expects many buyers to hold back in response to the interest rate cut.
“This increase in activity will undoubtedly put upward pressure on property prices and, even as monthly maintenance costs are reduced, affordability challenges will persist,” she said.
“Unless supply increases significantly, especially in cities like Toronto and Vancouver, the $1 million property standard will continue to evolve beyond larger homes.”
The Royal LePage-Leger poll is an online poll of 1,579 Canadians conducted between January 26 and January 28. There is no margin for error in this study.
Alicja Siekierska is a senior reporter at Yahoo Finance Canada. Follow her on Twitter @alicjawithaj.
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