Buying a home is one of the most critical decisions in a person's life, and many people in Ontario may consider purchasing a property in the United States or Canada. The cost of this purchase is naturally one of the most significant factors, so here is what you need to know about the cost of property in the United States and Canada, both short-term and long-term.
Real Estate Market Overview in the USA
The US real estate market is one of the largest in the world. There are vast home options in America, from affordable homes to luxury estates. According to Zillow, the median home value in the United States is $334,269 as of March 2023. This statistic is for all homes in America, and there is a massive variation in markets between states and cities. In states like New York, the average home price is $622,280.
Real Estate Market Overview in Canada
The Canadian real estate market is also vast, but it is relatively smaller than that of the United States. According to the Canadian Real Estate Association (CREA), Canada's national average home price is $686,371 as of March 2023. However, as with the United States, there are significant regional price differences. For instance, the average home price in Toronto, Canada's largest city, is over $1.1 million.
Factors Affecting Real Estate Prices in the USA and Canada
Several factors influence the prices of properties in both countries. One of the most important is the location. In the United States, properties in desirable areas, such as major cities or coastal regions, tend to be more expensive than those in rural areas. Similarly, homes in cities like Toronto are often more costly in Canada than in other parts of the country.
Another significant factor that affects real estate prices is the state of the economy. In times of economic growth, housing prices tend to increase, while in times of recession, they may decline. The global economic downturn during the pandemic caused home prices to skyrocket in both countries. The availability of jobs and the cost of living also influence the real estate market. For example, a city with a high cost of living may have higher real estate prices due to the increased demand for housing.
Comparing New York to Toronto
Overall, the costs of real estate may be similar when looking at both countries as a whole. But comparing apples to apples (or Big Apples in this case!) might be more logical. Toronto is Canada’s largest city. Real estate prices in the province of Ontario are the highest in the nation, and the population is larger in Toronto than in any other city in Canada. New York City is the most populous city in America (nearly double the second city of Los Angeles), and rent in the city is the most expensive, with an average of $6,164.61 per month.
Comparing the cities we looked at two different areas of each city and compared.
Toronto's Hip Queen West vs. Soho
A gorgeous 2 bed/ 2 bath 1700sf loft, with parking in Toronto’s hippest neighbourhood, is listed for rent at $7,700 CAD/ mo.
A 1,900 sf stunning loft in New York’s Soho district, with 2 bedrooms and 2 bathrooms, is listed for $9,750/ month
The Financial Districts in New York and Toronto
The Livmore building on Bay Street, in the heart of Toronto’s financial district, rents a 388 sf studio for between $2,454 - $2,604.
A 475 sf studio in New York’s Financial District will rent for between $3,401 – $3,456.
Other Factors That Could Determine Which Is Cheaper
With real estate prices being comparable between the two countries, you can lean on other factors to determine whether property would be cheaper in Canada or the U.S.
Cost of Living
Canada’s cost of living is cheaper than the US. If you are considering living in the country while investing in property to make money, you would be better off in Canada. The Numbeo Cost of Living Index estimates that consumer prices in Toronto are about 24.05% lower than in New York City (Numbeo)
“Canada has a decentralized, universal, publicly funded health system called Canadian Medicare. Health care is funded and administered primarily by the country’s 13 provinces and territories.” (Commonwealth Fund)
While many Canadians pay for at least partial private healthcare, healthcare costs are significantly lower than in the US.
So, what’s the final answer? Is it cheaper to buy property in Canada or USA?
It is cheaper to buy property in Canada than it is in the US. More importantly, though, for real estate investors, it is cheaper to live and work as a real estate investor in Canada. And the cherry on top of this cake? The quality of life in Canada is rated as 91, compared to 81 for US residents.
Want to get started as a property investor in Canada? The experts at Regalway Homes can help! To learn about investing in Ontario, get in touch with us: www.regalwayhomes.com/contact