Where to buy real estate in 2020: Top 35 cities

2020

In 1992, more than 400 volunteers gathered on the banks of Southwestern Ontario’s Speed River. Their aim was to build a pedestrian bridge using a timber-only construction—an architectural design from the 1800s—that would connect two sides of Guelph’s Royal Recreational Trail. 

The result was a 36.5-metre long walking bridge that is both bicycle and wheelchair accessible. The volunteer builders also made sure this bridge was completely covered, making it a go-to site in all kinds of weather conditions. But the biggest benefit was how this bridge, built more than 200 years after the City of Guelph was founded, helped galvanize the spirit of this city. It’s a spirit that captures the rural foundation of this urban centre, which still helps to shape its character. Even today, the agricultural studies program at the University of Guelph attracts students from across the city and around the world.

In essence, the bridge embodies the cultural importance of the “Royal City”—a moniker owing to Guelph’s founder, John Galt, who was a member of the British Royal Family known as the Hanoverians, descended from the House of Welf, also known as the Guelfs, or Guelph. It also helps illustrate the pride Guelph residents have in their city. 

Now, Guelph residents have one more reason to exhibit civic pride: This year, the city of Guelph topped the list in the MoneySense “Where to buy” Top 35 ranking.

Current Guelph residents won’t be surprised. Those who opted to buy into the Guelph property market in 2018 would’ve already earned 6.83% on that investment (based on average annual one-year rates of return). If that home was bought five years earlier, the average appreciation would translate into a little over $65,500 in added equity. 

Despite the value found in Guelph’s real estate—average home prices are less than $530,000—the real reason this city rose to the top of the list is because of strong economic fundamentals. But now, like many cities in Canada, Guelph will have to contend with the impact of the COVID-19 outbreak. Between February and March 2020, housing prices dropped 5% (although average prices are still sitting 8% higher year-over-year).

Before the COVID-19 outbreak, the city’s unemployment rate was 2.1%—about 350 basis points below the national average for 2019. It appears Guelph residents found it relatively easy to find employment, particularly given that the GDP for the city is 1.9%, higher than the national average of 1.7% (for 2019). Strong employment and decent average annual incomes give Guelph residents a chance to pay off their mortgage faster; it takes a little less than nine years to pay off a Guelph home purchase (assuming the average annual income is used solely to pay off that debt). This is significantly lower than Toronto’s home to income ratio, where it takes 15 years for residents to pay off that mortgage debt, or Vancouver, where it takes residents a little less than 20 years to pay off mortgage debt.

Still, the strength of the market going into the pandemic shutdown—with high buyer demand and strong employment—means that the market should eventually rebound once life returns to a more normal state and people can return to work. 

Further, Guelph’s proximity to Toronto means that residents will have ample options for finding employment or re-engaging with clients once the #FlattenTheCurve pandemic measures come to an end. Since Guelph is located less than an hour west of Toronto, commuters can pass beautiful limestone architecture and waterfront scenery while heading to and from their beautiful home. Now, add in the dynamic culture and high standard of living and you can begin to appreciate why this city is consistently voted a “best place” to live—and why it tops this year’s Top 35 list. 

Note: Home prices represent the average sale price of single-family homes as reported by the Canada Mortgage and Housing Corporation.