THUNDER BAY – BUSINESS – Thunder Bay is the best place in Canada to buy real estate for the second straight year, according to MoneySense magazine’s annual ranking of 35 cities. Thunder Bay’s top spot is attributed to residents’ strong buying power and excellent income potential of rental property. In Thunder Bay, where the average household income is $81,000, the average house is priced at just $216,000; resulting in a low house-to-income ratio of 2.7, a far cry from many of Canada’s other large cities where the average house costs as much as five, six, even nine times the average income.
Looking closer at living expenses, Thunder Bay’s rent index is only 23.35, according to Numbeo, where other Canadian urban centres have rent indexes approaching 30, 35, and 40. What’s more, the rental market is also favourable to landlords. MoneySense found that the average rent covers 106% of the average mortgage in Thunder Bay, making rental units affordable for renters and lucrative for investors. Among Canada’s worst cities to own rental property, rents collected from tenants often only cover about half, or even less than half of the average mortgage.
Thunder Bay real estate has appreciated faster than anywhere else in Canada – at an annualized rate of 8.4% over the last five years, as stated by MoneySense. “Although the market has been growing quickly, prices haven’t gone up so high as to price anyone out of the market. At the same time there is strong rental demand which makes it attractive to investors looking to own an income property,” explains Mark Brown, managing editor at MoneySense and co-author of the report. The city’s low unemployment rate and strong outlook also contribute to its high ranking, he adds. “When it comes to identifying the best place to buy real estate in Canada, Thunder Bay has everything we look for.”
As the price of a new home has remained reasonable despite market growth, owning a home in Thunder Bay is quite feasible even for millennials, the demographic most impacted by rising real estate prices. A millennial earning the median full time income in Thunder Bay would be able to save enough money for a 20% down payment on the average-priced home within 10 years. When earning and saving at the same rate, it takes most young Canadians longer than that to save for a home. Dr. Paul Kershaw of University of British Columbia and founder of GenSqueeze estimates that the average 25-34 year old Canadian must save for 12 years to save a 20% down payment for the average home. To buy a house in the Greater Toronto Area, it would take a 25-34 year old who is earning the median full-time income 15 years to save the down payment, and in Vancouver, a staggering 23 years.
Strategically located in the middle of Canada, Thunder Bay is a mid-sized, up-and-coming community with emerging knowledge-based sectors that provide a diversity of good jobs and academic opportunities. Its major employers include the regional hospital and health sciences centre, the local college and university, the Provincial Government, local school boards, the City of Thunder Bay, and Bombardier.
The Thunder Bay Community Economic Development Commission (CEDC) is responsible for business development, retention and expansion, entrepreneurial support, opportunity promotion, and collection and assessment of key business data. The CEDC receives formal proposals and projects that will contribute to economic development. It responds quickly to new opportunities and initiatives to attract direct financial involvement from government and private sectors. CEDC staff assists businesses to attain information essential to their decision making.
Located within the CEDC’s administrative office, the Thunder Bay & District Entrepreneur Centre provides free and confidential counseling, information, and resources to new and existing small businesses.