When it comes to laying down roots, the proverbial debate of the city versus the suburbs is likely to get a little more heated, as the majority of house prices in both Canada’s major urban and suburban neighbourhoods were found to have nearly doubled over the past 10 years, with urban dwellings appreciating slightly more than their suburban counterparts, according to the Urban vs. Suburban Survey released by Royal LePage Real Estate Services.
“A look back at the last 10 years in Canadian real estate growth reveals that typically, home prices in urban markets have grown faster than those in the suburbs, with both areas showing impressive appreciation," said Phil Soper, president and chief executive of Royal LePage Real Estate Services. “This decade has provided Canadians with the historically longest housing market expansionary
cycle in the nation’s history.
“It is no surprise that house prices have increased as much as they have; strong demand for amenities and limited supply in city centres have spiked prices upwards in urban areas, while affordability and spacious yards continue to attract buyers to the suburbs. It really comes down to a lifestyle choice.”
The last five years have seen Winnipeg’s average house price in both urban neighbourhoods and the suburbsskyrocket, according to the report. Many home buyers in Winnipeg want to live in urban locations close to work and amenities such as restaurants and shopping, which has contributed to pushing prices upward.
The proximity of the suburbs to the city centre has also attracted many buyers. As affordability tightens in Canada’s central cities such as Winnipeg, home buyers see the suburbs as a less costly option.
The country’s most impressive gains were in Edmonton where urban and
suburban condos more than tripled and quadrupled in price, respectively.
Of the 32 urban and 26 suburban markets examined across Canada, the national average price of a standard two-storey home in an urban neighbourhood appreciated by 129.2 per cent to $522,999, over the past decade. The same property type in the suburbs appreciated by 110.1 per cent to $334,380.
Over the last 10 years in Winnipeg, the average price of a standard two-storey home appreciated 141.6 per cent to $254,433, while the average in the suburbs increased by 124.1 per cent to $263,125.
The average price of an urban detached bungalow in Winnipeg rose by 131.9 per cent to $220,900, while the same home in the suburbs rose in average price by 119.1 per cent to $232,500.
Over the 10-year period, urban condominiums in Winnipeg rose in average price from $60,600 to $158,600, an appreciation of 161 per cent. In the
suburbs, the average price for a condo appreciated by 131.4 per cent, rising from $58,000 to $134,200 since March 1998.
The national average price of a bungalow in urban Canada appreciated by 122.3 per cent to $371,059, while its suburban counterpart rose by 115.2 per cent to $318,346, over the past 10 years.
The last decade saw the national average price of an urban condominium
increase by 131.5 per cent to $284,312, while the same property in the suburbs pressured upwards by 103.7 per cent to $212,323.
The study revealed that house price appreciation patterns differed significantly from city to city and across
different housing types. Some cities saw their surrounding suburbs appreciate more than urban properties, and others experienced a reversed pattern.
According to the report, factors
driving price increases in the country’s urban neighbourhoods generally included limited property availability, a desire to be near the workplace,
diverse amenities and more recently the rising cost of fuel, which when combined heightened buyer interest in city core areas.
Suburban price appreciation has mostly stemmed from the relative affordability of areas that are removed from the city core. The availability of affordable, larger properties with garages and more green space also appeals to buyers. Increases in the cost of doing business in commercial downtown areas have seen more corporate offices moving outside of urban areas, where many buyers are realizing that their workplace could be only minutes away from home in the suburbs.
Cities such as Winnipeg that have recently experienced huge levels of in-migration and are historically the most affordable have seen the highest price increases.
“Looking forward to the next 10 years, it’s likely that the great debate of city dwelling versus suburbia will continue,” said Soper. “Regardless of whether your home address is in the middle of an urban metropolis or you hang your hat many kilometres from the city centre, real estate is a solid long-term investment.”