In CRA’s words, you are considered a first-time home buyer if:
… you did not, at any time in the current calendar year before the account is opened or at any time in the preceding four calendar years, live in a qualifying home (or what would be a qualifying home if located in Canada) as your principal place of residence that either:
You owned or jointly owned
Your spouse or common-law partner (at the time the account is opened) owned or jointly owned
Here are the CRA qualifications to use the funds for a home purchase:
You will be considered to be a first-time home buyer if you did not, at any time in the current calendar year before the withdrawal (except the 30 days immediately before the withdrawal) or at any time in the preceding four calendar years, live in a qualifying home (or what would be a qualifying home if located in Canada) as your principal place of residence that you owned or jointly owned.
Read closely
Did you spot the difference between the two definitions, opening and withdrawing? When withdrawing from the account to purchase a home, there is no mention of a spouse in the definition. It matters if your spouse owns a home when opening an account but not when you are purchasing a new home.
Have a personal finance question? Submit it here.
The other differing clause in the definition is “except the 30 days immediately before the withdrawal.”This is important. You must withdraw money from your FHSA within 30 days of closing; otherwise, it will no longer be a qualified withdrawal and will be taxed if withdrawn. I know, you’re thinking you will use the money for the down payment, so it won’t be an issue. Perhaps, but what if you have other money for the down payment and you intend to use the FHSA for furnishings or renovations? The 30 days may quickly slip by before you get around to withdrawing the funds.
Again, you are good to continue contributing to your FHSA and then use the funds to purchase your first home even though you are living with your wife in the home she owns.
Other FHSA rules worth noting
You made a really good decision to use the FHSA to save for a home. It is one of the best, if not the best, accounts available to anyone who qualifies and plans to purchase a home sometime in the next 15 years. When used as intended, you get a tax deduction on the money you contribute, just like a registered retirement savings plan (RRSP) contribution. Then, when you draw money to purchase a home, your money comes out tax-free, just like a tax-free savings account (TFSA). It’s the best of both worlds—you never pay tax on that money, coming or going!
Article Continues Below Advertisement
You can add $8,000 per year to a FHSA to a maximum contribution limit of $40,000. The tax deduction doesn’t have to be claimed in the year you make the contribution and can be saved for future years when you have a higher income. When you claim and receive the tax refund, do your best to save it. It can be added to an RRSP, allowing you to use the RRSP Home Buyers Plan, or to a TFSA.
Compare the best FHSA rates in Canada
It is important to note that you can catch up past FHSA contribution room, but only back to the year you opened the account. This is different from a TFSA, where you can go back as far as when you were age 18 or the TFSA inception date (2009), whichever is sooner.
When catching up, the most you can add to a FHSA in any given year is $16,000, meaning you can only catch up one year at a time. For anyone about to purchase a home without an FHSA and extra cash, consider borrowing $8,000 to open a FHSA. You can claim the $8,000 as a tax deduction and use the tax savings to purchase an appliance or two. For someone in a 30% tax bracket, you would benefit from about $2,400 in tax savings. Once your home closes, withdraw the $8,000 and pay off the loan and you will have paid very little interest.
The FHSA escape clause
If it turns out you never purchase a home or can’t make a qualifying withdrawal, you can transfer your FHSA funds to an RRSP. You won’t get a tax deduction because you got that when you contributed to the FHSA. What you do get, though, is an extra $40,000 of RRSP contribution room.
This was a good question, Shelly. The FHSA is a good, seemingly straightforward account—but you do have to be to be onside with the definitions.
Get free MoneySense financial tips, news & advice in your inbox.
With over 30 years as a financial planner, Allan is an associate portfolio manager at Aligned Capital Partners Inc., where he helps Canadians maintain their lifestyles, without fear of running out of money.
A starter home is the most affordable type of house or living space a first-time buyer can purchase.
The median price of a starter home in September 2025 was $260,205.
What used to be a 3-to-7-year stay in a starter home is now stretching much longer as the market remains competitive and interest rates stay high.
Deciding whether to keep renting, buy a starter home, or go straight to a forever home depends on your personal financial and life goals.
While starter homes aren’t as widely available as they once were, they can still be found in certain markets.
If you’re thinking about buying your first place, a starter home is your launchpad into real estate. Typically the most affordable option for first-time buyers, starter homes are smaller and come with a more manageable price tag than the broader market.
The concept took off after World War II, when small, affordable homes helped returning soldiers and their families step into homeownership, a key part of the American Dream.
Today, things look different. Cheap land is harder to come by, and buyer expectations have also evolved. In cities and busy suburbs, starter homes might look like a condo in Miami, FL or a townhouse in Portland, OR rather than a quaint single-family home. Rising land costs, limited inventory, and changing buyer demographics all influence what qualifies as a starter home today.
“Starter homes aren’t what they used to be,” says Redfin Senior Economist Elijah de la Campa. “Today, a small fixer-upper condo is often all a first-time homebuyer can afford. The American Dream is changing; for many, it no longer involves a house and a white picket fence.”
Historically, starter homes were smaller, more affordable houses designed to help first-time buyers enter the market. Often around 1,200 square feet with two bedrooms and one or two baths, these homes sometimes came with trade-offs like less desirable locations or fewer upgrades.
Now, a home’s price is likely to define if it is a starter home—and what’s considered “entry-level” homeownership can vary widely by region. In high cost of living areas, homes that need TLC often sit at more approachable price points for first-time home buyers than turnkey homes. But with renovation costs on the rise, demand for move-in-ready homes is starting to outpace that of fixer-uppers.
How much does a starter home cost?
Generally, the cost of a starter home is priced below the average home in any given area. According to Redfin data, the median price of a starter home in September 2025 was about $260,205, and the average income needed to afford one was around $79,400.
But the national average and the cost of houses for sale in your area can look drastically different. In many places, rising home prices have outpaced income growth, making affordability a big challenge. The overall median home price in the country, for instance, grew from $296,485 in December 2019 to $427,179 in December 2024, a jump of 44%.
High demand from first-time buyers and downsizers, combined with limited entry-level inventory, has created a competitive market. In fact, the average age of a first-time buyer in the US is now 38, up from 35 the previous year.
“Starter home prices have climbed so much over the last decade that even with mortgage rates coming down from their peak, affordability is still a huge hurdle,” says David Palmer, a Redfin Premier agent in Seattle.
“At the same time, buyers who already own a home have more leverage—they can use the equity they’ve built to make stronger offers. That means entry-level buyers are often losing out to move-up buyers who have deeper pockets.”
Starter Home Affordability by Metro: 10 Most Populous Metros (September 2025)
Metro Area
Income needed to afford median priced starter home
Median starter home sale price
Estimated median household income
% of starter homes affordable at median income
New York City, NY
$166,318
$471,847
$104,146
2.27%
Los Angeles, CA
$183,805
$641,624
$100,550
0.07%
Chicago, IL
$83,203
$230,458
$94,673
98.16%
Houston, TX
$83,264
$244,027
$84,918
97.61%
Dallas, TX
$102,048
$294,826
$96,721
79.98%
Miami, FL
$110,857
$347,950
$84,092
6.70%
Atlanta, GA
$87,353
$276,505
$96,315
71.50%
Philadelphia, PA
$52,834
$170,030
$94,757
96.31%
Washington, DC
$122,768
$390,711
$131,672
82.25%
Phoenix, AZ
$103,450
$350,000
$94,009
16.13%
Redfin data as of September 2025
How long should I stay in a starter home?
In the past, many homeowners stayed in their starter homes for around three to seven years building equity. However, it’s now common to see homeowners stay put longer, averaging 12 years in many parts of the country. First-time buyers in particular are taking longer in their search for a home that meets their needs more long-term.
How long you actually stay in a starter home often depends on your personal situation. Maybe your family grows, you get a new job that requires a move, or your financial situation changes, allowing you to look for a bigger or more permanent “forever home.”
For first-time buyers and seasoned homeowners alike, the decision to continue living in their current home helps avoid rising home prices and potentially higher interest rates—otherwise known as the “lock-in” effect.
Starter home vs forever home vs renting
So is buying a home better than renting in today’s economy? If you’re thinking about buying a starter home, it’s helpful to compare it to other options like continuing to rent, or jumping straight into a “forever home” to choose what works best for your long term goals.
Is renting or buying better long term?
For many, deciding whether to rent or buy is not only about the numbers, but what kind of stability and flexibility you want in your life.
Buying a home can bring long-term financial and emotional rewards. Each mortgage payment helps you build equity, giving you something tangible for your money. Rent, on the other hand, can increase over time, while a fixed-rate mortgage offers predictable payments. Plus, homeowners might qualify for tax breaks on mortgage interest and property taxes.
But if you’re saving up for a strong down payment, expect to move in a few years, or prefer fewer responsibilities, renting could be a smart choice over buying.
Pros of buying a starter home over renting
The opportunity to build long-term wealth through home equity and appreciation. The payments you make on your mortgage go towards your personal wealth, rather than to a landlord.
More stable: predictable and steady monthly payments and potential tax benefits help with long-term financial planning and budgeting.
The freedom to make it your own: paint, remodel, garden. You’re not limited by a lease or landlord permission.
Even if it’s not your forever home, a starter home can help you build equity, credit, and make it easier to move up later; and if you sell, that equity can go toward your next down payment.
Cons of buying a starter home vs renting
Buying comes with higher upfront costs: the down payment, closing costs, inspections, and moving all add up—not to mention savings for emergencies. Renting is usually the first month’s rent and a deposit.
Maintenance and repairs fall to the homeowner: When you rent, the landlord or property management is responsible for any repairs; if you own your home, the cost and responsibility falls to you.
Less flexibility to move: Selling a home takes time and money. If life changes quickly, like a new job in another city, it can be harder to make the move than breaking a lease.
If you are ready to buy, what kind of home you should look for ultimately depends on your lifestyle, goals, and timeline.
A forever home is designed for the long haul—usually, for those planning to stay around 10 years or longer. There’s space to indulge in projects or hobbies, host friends and family, and put down roots. But forever homes usually have higher price tags and ongoing expenses that can stretch the budgets of first-time buyers.
Starter homes, on the other hand, can get you building wealth sooner and gain experience as a homeowner, even if it’s not your dream home yet.
Pros of a starter home over a forever home
More affordable entry point: Starter homes usually have a lower purchase price, a smaller down payment, and more manageable monthly payments.
You build equity sooner: Each payment you make on your home grows your investment; and according to Redfin data, lower-priced starter homes are in high demand compared to houses at the top of the price tier.
Lower upkeep costs: Smaller, less-expensive homes often come with lower property taxes and less maintenance than larger houses.
A faster path to homeownership: A starter home might not have everything on your wishlist, but it helps get your foot in the door of real estate and learn what matters for you in a home.
Cons of buying a starter home instead of a forever home
You might outgrow the space faster than you think, especially if you work from home, want to rent out rooms, or start a family.
Starter homes in many areas often need updates or repairs, especially if the home is older.
A starter home might not have all the features you want in a home long-term, or be in a less desirable area.
You’re more likely to move again, repeating the buying and selling process which can be expensive. If you don’t stay in the home long enough, you might even experience a loss in equity.
In the long run, while the initial plan might be to move to a bigger place later, some people find that their starter home suits them perfectly and they choose to stay for many years, or even for good. Over time, with some updates, additions, and personal touches, a starter home can become the perfect forever home.
Where can I find affordable starter homes?
If you’re looking for affordable starter homes, there are some key locations to watch. Some areas in the Midwest, for instance, could actually see home prices rise due to more people moving to the Rust Belt.
“Midwest cities have risen in popularity because they’re more affordable than cities in other parts of the country, but many buyers are now widening their search to the suburbs after being priced out of popular urban areas,” says Redfin Chief Economist Daryl Fairweather.
Heading south, Texas and Florida are known for having a decent number of starter homes generally priced below the national average, with home building rates and land availability being key factors. On the East Coast, cities like Harrisburg, PA; Rochester, NY; and Baltimore, MD, are looking promising for first-time buyers because they’re relatively affordable and have job opportunities. The Sun Belt region is also seeing growth, with builders drawn to lower land and labor costs.
Make sure your income is stable, your credit score is in good shape, and you’ve started saving for a down payment and closing costs.
Factor in additional costs like property taxes, insurance, and maintenance. This comprehensive Redfin guide walks you through what to budget.
Ask yourself: am I ready to stay put for a few years? Owning makes most sense when you plan to stick around.
2. Know what you can afford and stick to a budget
With starter homes especially, the budget tends to be tighter: consider a smaller sized home, fewer amenities, and lower maintenance expectations so you don’t overextend yourself.
3. Find your “must-haves” vs your “nice-to-haves”
Because you’re buying a starter home, it’s especially useful to write down what you absolutely need (location, commute, number of bedrooms) and what you can compromise on (yard size, high-end finishes).
You’ll probably upgrade later: a lower upfront cost now can mean more flexibility later.
4. Choose the right location (but expect trade-offs)
Location matters: a slightly smaller home closer to work or amenities might make more sense than a bigger home farther out.
Also evaluate resale potential: since starter homes are often short-term stepping stones, you’ll want a neighborhood that remains desirable.
5. Work with your team (agent, lender, inspector) and start searching
Pick a real estate agent who knows the “starter home” market in your area and can help you find realistic opportunities.
Start touring homes with your list in mind. For each property you visit, pay attention to the condition, upkeep needs, how much work you’re willing to take on.
6. Make an offer and be realistic
Don’t get into a bidding war for a home that puts you above your budget just because you feel you have to.
Think about what contingencies you’ll include (like inspection and appraisal) so you don’t walk into unexpected costs or issues.
7. Inspect, appraise, and close the deal
Once you’ve secured an offer, you’ll move to the home inspection. As a first-time homebuyer, getting an inspection protects you from buying a money pit.
After everything checks out, you’ll get the home appraised, close, and move in. (This process can take 45-60 days after offer acceptance, but timelines vary.)
8. Plan ahead for your time in the home
While starter homes are often thought of as the first of many homes, many people stay longer than planned. As you live there, treat it as both a home and an investment.
Be aware of resale costs: if you sell too soon you might not build enough equity. Staying at least two years ensures you won’t pay capital gains tax, but it could take even longer for your home value to grow enough to make sense to sell.
While high demand, limited inventory, rising construction costs, and competition from investors and downsizers have made starter homes harder to find, buying one is still possible—especially with a bit of strategy and flexibility.
One promising trend is the increase in housing inventory, particularly in the entry-level market. More available homes mean more options and, in many areas, less intense competition than in recent years.
Smaller homes and multi-family options like duplexes and townhouses are also gaining popularity as buyers prioritize affordability. Though the path to homeownership may still involve compromise, rising supply and slowing price growth are opening more doors for first-time buyers. While the housing market is constantly changing, starter homes are still a viable solution to homeownership.
FAQs about starter homes
What does a starter home mean? A starter home is usually a homebuyer’s first step to homeownership: a smaller, more affordable place that helps you enter the housing market. While it might not immediately be your dream home, a starter home allows you to start building equity and gain experience as a homeowner. Over time, that equity can help you move up to a larger or more permanent “forever” home.
What is a good starter home? A good starter home balances affordability, location, and potential. It’s a place that fits your budget today but still meets your basic needs: enough bedrooms, a manageable commute, and a space you can maintain financially. Whether it’s a condo, townhouse, or cozy single-family home, the best starter home is one that helps you start building stability and confidence as a homeowner while sticking within a reasonable budget.
Is there such a thing as a starter home anymore? Starter homes still exist, they just look a little different in today’s market. Inventory availability and rising prices have redefined what a starter home looks like to include smaller homes, fixer-uppers, and even condos or townhomes. While the definition of a starter home has evolved, the idea of starting small and building equity over time is still very much alive.
How long do people typically stay in a starter home? Many homeowners are extending their stay in their starter home for around 5-10 years, but there’s no hard and fast rule. Some people move sooner as their needs or situations change, and others stay longer and might even turn their first home into their forever one. What’s important is that your starter home helps you grow both personally and financially in a way that supports your next steps.
Confirm every detail in writing. Don’t assume what you see stays. Always verify inclusions and exclusions in real estate in your purchase agreement before signing.
Understand the difference. Inclusions are items that are built in or attached to the property, while exclusions are personal or removable features the seller plans to take.
Lean on your agent’s expertise. A knowledgeable real estate agent can help you negotiate clearly, avoid misunderstandings, and ensure the contract reflects your expectations.
You’ve finally found it: the home that checks every box. Whether you’re a first-time buyer or relocating for new opportunities, this one feels special. There’s a tranquil koi pond in the backyard and a custom-built refrigerator in the kitchen that fits perfectly with the design. You make an offer, it’s accepted, and moving day can’t come soon enough.
But during your final walkthrough, you notice something’s missing: the pond is empty, and the refrigerator is gone.
What are inclusions and exclusions in real estate?
When buying a home, it’s easy to assume that everything you see during a showing will stay after closing, but that’s not always the case. What remains or is removed depends on what’s listed in your purchase agreement or MLS description.
Here’s a quick breakdown:
Inclusions – Items that stay with the home after the sale. These are typically built-in or permanently attached, such as:
Kitchen appliances (like built-in ovens or dishwashers)
Light fixtures and ceiling fans
Landscaping or outdoor structures that are attached to the property
Exclusions – Items the seller plans to remove before closing. These are usually personal property or easily detached, such as:
Freestanding refrigerators or washers and dryers
Window treatments or decorative mirrors
Portable garden décor, even that koi pond setup
Understanding inclusions and exclusions helps buyers clarify what’s part of the deal and avoid last-minute surprises before move-in day.
How to negotiate inclusions and exclusions in real estate
Once you understand what stays and what goes, make sure those details are clearly outlined in your offer. During negotiations, buyers and sellers can agree on which items are included or excluded from the sale, and it’s essential to document everything in writing.
When you submit your offer, your agent will list specific inclusions and exclusions in the purchase contract, such as appliances, window coverings, or outdoor features. Clear documentation protects both sides; buyers know exactly what they’re getting, and sellers can avoid disputes later in the process.
Tips for negotiating effectively
Negotiating inclusions and exclusions can feel tricky, especially for first-time buyers. The key is to stay clear, flexible, and focused on what matters most.
Here are a few smart strategies:
Prioritize your must-haves. Decide which items are nonnegotiable before submitting your offer, such as a custom refrigerator or patio furniture.
Put everything in writing. Verbal agreements can lead to confusion, so have your agent include all inclusions and exclusions in the contract.
Stay realistic. Sellers may have sentimental attachments to certain items, like chandeliers or garden statues; be open to compromise if the overall deal works in your favor.
Ask early. If you’re unsure whether an item stays, ask your agent during the showing before you get attached.
Lean on your agent’s expertise. Experienced agents know how to structure offers that balance your priorities with what the seller will accept.
By addressing exclusions upfront, buyers can move forward with confidence, knowing exactly what’s included in their new home.
Real-world example: When inclusions get confusing
Here’s a real-life scenario that shows why it’s important to double-check your contract.
A Maryland buyer toured a home that included window air-conditioning units, as noted in the listing. After the seller accepted their offer, the Non-Realty Items & Exclusions page of the initial contract was left blank. The buyer’s agent asked for the air-conditioning units to be added, and when the updated contract came back, it unexpectedly included additional appliances — a washer, dryer, and microwave — that weren’t part of the original offer.
Once both parties signed, those items became enforceable parts of the contract. If the seller had added them by mistake or refused to provide them later, it could have led to a dispute.
The takeaway: Always review every page of your purchase agreement carefully and confirm all inclusions and exclusions before signing. If anything seems unclear, consult your agent or a real estate attorney for clarification.
Frequently asked questions
Can I negotiate what’s included or excluded in my offer? Yes. Buyers and sellers can negotiate inclusions and exclusions as part of the offer. Once both sides agree, those terms must be listed in the written contract to be enforceable.
Are inclusions and exclusions legally binding? Yes. After both parties sign the purchase contract, all listed inclusions and exclusions become legally binding. If a seller fails to leave an agreed-upon item, the buyer may have grounds for dispute. Always review your final contract before closing.
Can exclusions affect a home’s value? They can. A home with high-end appliances or custom features included in the sale may attract more buyers. Removing key fixtures or appliances, however, could reduce the home’s perceived value or lead to tougher negotiations.
Final thoughts on inclusions and exclusions in real estate
Buying a home involves a lot of moving parts, and knowing what stays and what goes is one of the most important. By understanding inclusions and exclusions, you can avoid surprises and feel confident about what’s truly part of your new home.
Work with your agent early to document everything clearly, so when closing day arrives, you’ll get exactly what you expected, and nothing you didn’t.
Yes, you can buy a home self-employed: You’ll just need extra income proof for lenders.
Keep paperwork ready: Tax returns and bank statements show steady earnings.
Boost your finances: Strong credit, low debt, and savings make approval easier.
Buying a house while self-employed can feel more complicated, but it’s far from impossible. Without W-2s or Without W-2s or an employer to verify income, lenders will ask for more documentation to confirm your earnings. Even if you pay yourself a steady salary, lenders typically want extra proof that your business income is consistent and sustainable. With the right preparation you can qualify for a mortgage and move forward with confidence.
Whether you’re buying a house in Austin, TX, or a home in Denver, CO, this guide explains what lenders look for, the documents you’ll need, and strategies to improve your chances of approval – no matter if you run your own business, freelance full time, or work on 1099 contracts.
Can you buy a house if you’re self-employed?
Yes, you can absolutely buy a house if you’re self-employed. Lenders approve self-employed buyers every day, but the process often comes with more paperwork and closer scrutiny. Unlike W-2 employees, whose income is steady and easy to verify, self-employed buyers usually have fluctuating earnings and no traditional employer to back them up. Because of this, lenders require additional proof, like tax returns, business records, and bank statements, to show that your income is consistent and reliable enough to make monthly mortgage payments.
How lenders view self-employed income
When you’re self-employed, lenders look beyond your job title or business name. Their goal is to see whether your earnings are steady enough to cover a mortgage for years to come. Here are the main factors they review:
What counts as income
Income can come from many sources: business profits, 1099 forms, dividends, or other documented earnings. What matters most is that the income can be verified through official records. A verbal promise of future work or an unsigned contract isn’t enough. Lenders need a clear paper trail to prove your earnings are real and repeatable.
Tax return requirements
Most lenders ask for at least two years of personal and business tax returns. These provide a detailed picture of your income history, showing whether your earnings are steady or unpredictable. Consistency reassures lenders that your income isn’t just a short-term spike but a reliable foundation for long-term payments.
Debt-to-income ratio (DTI)
DTI compares how much of your income goes toward monthly debts (like car loans or credit cards) against what you earn overall. Lenders often want to see a DTI under 43%, though lower is even better. A healthy DTI shows that you aren’t overextended, which makes lenders more confident that you can handle a new mortgage.
Credit score
Your credit score is a snapshot of how well you manage debt. For self-employed buyers, a higher score is especially important because it offsets the uncertainty of fluctuating income. A strong credit history can help you qualify for lower interest rates, saving you money over the life of the loan.
7 steps to buying a house when you’re self-employed
The homebuying process looks a little different when you work for yourself. Following these steps can help make the process smoother and improve your chances of getting approved:
1. Get pre-approved early
Pre-approval shows sellers you’re serious and helps you understand how much you can afford. For self-employed buyers, it also gives lenders more time to review your financials.
2. Gather documents in advance
Having tax returns, bank statements, and profit-and-loss reports ready will speed things up and reduce stress during the loan application.
3. Work with a lender experienced in self-employed mortgages
Some lenders are more familiar with non-traditional income sources. Choosing one who understands self-employed borrowers can make the process easier.
4. Be ready for more questions during underwriting
Expect lenders to dig deeper into your income and business. Providing clear, organized records up front can help keep the process moving.
5. Secure financing before house hunting
This ensures you’re ready to make an offer quickly when you find the right home.
6. Separate business and personal finances
Keeping separate accounts makes it easier for lenders to verify your income and expenses. If your finances are mixed, underwriters may question whether deposits are personal earnings or business revenue, which can slow things down. Clear separation shows professionalism and builds lender confidence.
7. Keep your taxes and records up to date
Filing your taxes on time and maintaining accurate records shows that your business is stable and well-managed. Lenders rely heavily on tax returns to calculate income, so being current avoids delays and ensures they’re working with the most accurate information.
Documents you’ll need to show lenders
Self-employed buyers usually need to provide more paperwork than W-2 employees. Lenders want to see proof that your income is both consistent and reliable. Common documents include:
Two years of personal and business tax returns: Gives lenders a full picture of your income history and business performance.
Year-to-date profit and loss (P&L) statements: Shows how your business is performing in the current year beyond what’s on your tax returns.
Bank statements (personal and business: Verifies cash flow, savings, and that your income matches what you’ve reported.
1099 forms or client contracts: Demonstrates steady work and incoming revenue, especially if you work with multiple clients.
Proof of ongoing work or pipeline: Examples include signed contracts, recurring invoices, or future agreements. These reassure lenders that your income will continue.
How to improve your chances of approval
Being self-employed doesn’t mean you can’t qualify for a mortgage, it just takes more preparation. These strategies can make you a stronger applicant:
Build and maintain strong credit: A higher credit score signals that you manage debt responsibly, which helps offset concerns about fluctuating income.
Save for a larger down payment: The more money you put down, the less risk for the lender. A bigger down payment can also help you secure better loan terms.
Separate business and personal finances: Using different accounts makes it easier for lenders to verify income and expenses. It also shows you manage your business professionally.
Keep consistent records and limit aggressive write-offs: Writing off too many expenses lowers your taxable income, which can hurt your loan eligibility. Clean, accurate records give lenders confidence.
Lower your debt before applying: Paying down credit cards, auto loans, or other debts improves your debt-to-income ratio and makes your application more attractive.
Loan options for self-employed borrowers
Self-employed borrowers have access to many of the same loan types as W-2 employees, but some programs are more flexible than others. Here are the most common options:
Conventional loans: The most widely used mortgage type. Conventional loans typically require two years of tax returns and strong credit, but they can offer competitive rates if you meet the requirements.
FHA loans: Backed by the Federal Housing Administration, FHA loans allow for lower credit scores and smaller down payments. They still require proof of steady income, but can be more accessible for first-time buyers.
Bank statement loans / non-QM loans: These “non-qualified mortgage” options let you qualify using 12–24 months of bank statements instead of tax returns. They’re designed for self-employed borrowers with complex finances, but often come with higher interest rates.
Portfolio lenders and credit unions: Smaller lenders and credit unions may keep loans in-house rather than selling them to investors. This gives them more flexibility to work with self-employed borrowers who don’t fit standard guidelines.
Common challenges for self-employed buyers
Buying a home while self-employed is possible, but it often comes with extra hurdles. Some of the most common challenges include:
Irregular income: Lenders prefer predictable paychecks. Fluctuating income can make it harder to prove that you can consistently cover a mortgage.
Writing off too many business expenses: While deductions lower your tax bill, they also reduce your reported income. A smaller taxable income may make it look like you earn less than you actually do.
Large down payment requirements: To offset risk, some lenders may ask self-employed buyers to put more money down compared to W-2 borrowers.
Stricter underwriting: The review process is often more detailed, with lenders double-checking documents and asking more questions than they would for traditional employees.
The bottom line when buying a house self-employed
Buying a house while self-employed takes extra preparation, but it’s completely achievable. Lenders want to see that your income is steady, your records are organized, and your finances are strong enough to manage a mortgage. By gathering the right documents, keeping business and personal accounts separate, and working with a lender experienced in self-employed mortgages, you can put yourself in a strong position to qualify. With the right strategy being your own boss doesn’t have to stand in the way of becoming a homeowner.
Buying a house self-employed FAQs
1. Is it harder to buy a house if you’re self-employed?
Yes. Lenders require stricter income verification, but with the right documentation, it’s very possible to qualify.
2. How many years of self-employment do you need to get a mortgage?
Most lenders want at least two years of self-employment income history to show stability.
3. Do lenders use gross or net income for self-employed borrowers?
Lenders typically use net income (after expenses) from your tax returns, not gross revenue.
4. Can you buy a house with one year of self-employment?
Some lenders may allow it if you have strong credit, a large down payment, and prior work experience in the same field.
5. Are there special mortgage programs for self-employed people?
Yes. Bank statement loans and portfolio lenders may offer more flexible options compared to traditional loans.
17. 2018: Transitioning to more protectionist policies, the United States initiated a renegotiation of the North American Free Trade Agreement (NAFTA)—brought into force in 1994. The Canadian government worried it could significantly affect exports to the country’s largest trading partner. The conflict led to a short-lived but dramatic trade war. Canada, the United States and Mexico ended up negotiating a new trade deal—the United States–Mexico–Canada Agreement (USMCA)—which includes a sunset clause after 16 years.
18. 2019: The federal government was concerned about retirement security, with the decline of workplace pension plans and Canadians’ low savings rate. So, it expanded the Canada Pension Plan (CPP). The public pension plan will grow to replace 33.33% of Canadians’ average work earnings, up from 25%. Over the seven-year roll-out of the program’s enhancement, CPP contributions will also continue to increase.
19. 2020: The COVID-19 pandemic swept through the world, and it had dramatic repercussions on the economy. The federal and provincial governments enacted various degrees of lockdowns across Canada to try to contain the virus’ impact.
Image by Drazen Zigic on Freepik
20. 2020: The government spent hundreds of billions of dollars to pay for benefits that encouraged Canadians to stay home and practice social distancing, most notably, the Canada Emergency Response Benefit (CERB), which was a $2,000 taxable monthly payment. The government also loaned huge sums to businesses to support them through lockdowns that prevented many from operating. The high spending level is one of the factors that led to runaway inflation over the next few years.
21. 2021: Saving rates increased significantly during the pandemic at the same time that the Bank of Canada dropped interest rates to historic lows. Those factors and others led to a boom in Canada’s housing market. Previously, high prices had been mostly limited to major cities, but 2021 saw housing prices rise across the nation, exacerbating long-standing housing affordability issues.
22. 2021: The huge supply of money that entered the economy during the pandemic due to government spending and borrowing, plus supply chain disruptions, led to a dramatic increase in inflation. Houses, cars, groceries and other daily essentials all rose significantly in price.
23. 2022: The Bank of Canada started hiking interest rates rapidly to try to tamp down runaway inflation. Housing prices stabilized (and even fell slightly), but affordability remained an issue as some borrowers’ mortgage payments increased, even doubled. The stock market entered a slump, while prices on everyday goods like gas and groceries remained high, leading to frustration for many Canadians.
24. 2023: The federal government continued to increase its immigration targets to unprecedented levels, letting in millions of international students and low-wage, low-skilled workers under temporary worker programs. The surge in population challenged Canada’s already-tight housing market and strained health-care systems. Wages, which had begun to rise shortly after the pandemic because of labour shortages, started to stabilize. Widespread support for immigration, which had for decades been positive, began to waver.
“It is going to put the dream of home ownership in reach for more young Canadians,” Freeland told reporters Monday, announcing changes she said will come into force in December.
How much do Canadians need for a down payment?
The price cap for insured mortgages will be boosted for the first time since 2012, moving to $1.5 million from $1 million, to allow more people to qualify for a mortgage with less than a 20% down payment.
“That is going to have a real impact for thousands, even millions of Canadians,” Freeland said.
You’re 2 minutes away from getting the best mortgage rates in CanadaAnswer a few quick questions to get a personalized rate quote*You will be leaving MoneySense. Just close the tab to return.
What can you buy with a 30-year mortgage?
The government will also expand its 30-year mortgage amortization to include first-time homebuyers buying any type of home, as well as anybody buying a newly built home. On Aug. 1 eligibility for the 30-year amortization was changed to include first-time buyers purchasing a newly-built home. Freeland said this change better reflects the housing market while “giving first-time homebuyers a leg-up.”
She pushed back on suggestions that the measures will only further inflate housing prices. She said boosting the price cap for insured mortgages reflects how Canada’s gross domestic product has grown over years. “It needs to keep up with the increase in the size of the Canadian economy,” Freeland said. “That’s just a recognition of economic reality.”
Bill of rights for Canadian home buyers
Justice Minister Arif Virani is also releasing drafts for a bill of rights for renters as well as one for homebuyers, both of which the government promised in its federal budget five months ago. Virani says the government intends to work with provinces to prevent practices like renovictions, where landowners evict tenants and make minimal renovations and then seek higher rents.
In announcing the rate cut Wednesday, Bank of Canada governor Tiff Macklem said if inflation continues to ease broadly in line with the bank’s July forecast, it is reasonable to expect further cuts in the policy rate.
Julie Leduc, a mortgage broker at Mortgage Brokers Ottawa, said clients with variable-rate loans were not happy when rates were rising, but the cycle is turning.
“We’ve lived the worst of it, we’re on our way out,” she said.
“So let’s look for the benefits and the benefit is, if they go variable and the rates go down, they’re going to live the benefit.”
Right now, the rates offered to those looking for a new variable-rate mortgage or needing to renew are higher than those being offered for five-year fixed rate mortgages, something that Leduc called an anomaly.
That’s because the expectations are that the Bank of Canada will continue to cut interest rates, lowering the amount charged to borrowers in the future. If something unexpected happens and the central bank doesn’t cut rates, then the rates charged on variable-rate mortgages won’t go down.
What to expect if you’re mortgage holder
But if things continue to roll out as expected, those choosing variable-rate loans will see the amount they are charged go down. Just how much and how quickly will depend on the central bank.
Sojonky says the discounts lenders offer to the prime rate for variable-rate mortgages are also improving.
Late last year, changes to Ontario’s real estate legislation, the Trust in Real Estate Services Act (TRESA), came into effect, making open bidding legal in Ontario. (Real estate is generally regulated at a provincial level, so as of now, these changes only apply to Ontario.) It was big news at the time, but has it made a big impact? Here’s what this legislation means for buyers and sellers in the province, and how it could influence the housing market.
What is open bidding in real estate?
Open bidding in real estate is when the details of all registered offers on a property are shared openly between prospective buyers. This means that if four different offers are registered on a house, the four potential buyers can see the specifics of each competitor’s offer, including the purchase price, deposit, closing date and other terms. The name of each person making an offer is withheld, and if the purchase is contingent on the sale of another property, that information is also confidential.
Unlike a closed bidding process—often referred to as blind bidding—open bidding allows each prospective buyer to know exactly how their offer compares to the competition. It also means that they can adjust their offer based on this information (within a given timeframe). Open bidding eliminates a lot of the guesswork in making an offer on a home, and it’s intended to maximize transparency between buyers and sellers.
You’re 2 minutes away from getting the best mortgage rates in CanadaAnswer a few quick questions to get a personalized rate quote*You will be leaving MoneySense. Just close the tab to return.
What impact has open bidding had on Ontario’s housing market?
In 2022, the federal government announced that it would be implementing a Home Buyers’ Bill of Rights. One of the goals of the bill was to make housing more affordable by putting an end to blind bidding, and it appears to have influenced the changes to the TRESA. However, blind bidding has not been banned in Ontario or anywhere else in Canada at this time. Because this new legislation makes open bidding optional, not mandatory, blind bidding is still commonplace in Ontario.
“Open bidding brings more visibility to the buying process,” says Doug Vukasovic, a realtor in Toronto. That said, he isn’t seeing open bidding being used broadly yet: he’s only represented one buyer in an open bidding process, and so far none of his listing clients have opted to use open bidding. “It’s not something people are gravitating towards.”
Based on what he’s seeing in Toronto, Vukasovic doesn’t think that open bidding will have an impact on real estate prices. Changes in the market will come from interest rates, he says, noting that after a slight cool-down in some regions, the demand for houses should gradually increase as mortgage lending costs continue to ease. In other words, affordability is the bigger factor. “We need lower interest rates for people to be comfortable placing an offer,” he says.
How can sellers decide if open bidding is right for them?
Once you share the details of your listing with prospective buyers, there’s no going back—but you can change the bidding process from closed to open relatively easily. “At any point during the bidding war process, a seller can change from closed to open bids,” Vukasovic explains. “They just need to give written consent to the agent” and disclose the change to buyers.
It rarely benefits a seller to start with open bidding, Vukasovic says, but it can be helpful once several bids have been registered on the property. For example, if the top three offers on a million-dollar-plus home are within $20,000 of each other, a seller can open up the bidding process to encourage each of those prospective buyers to put in their best and final offer. In this situation, the buyers benefit from greater price transparency, and the seller wins if one of the bidders decides to increase their offer.
However, when the top two offers on a property are farther apart—say, by $100,000 or more—it’s unlikely that the seller would want prospective buyers to know that through open bidding, as the higher bidder might pull their offer to avoid overpaying for the property. This scenario is far less common than the one described above. “Someone’s got to stick their neck out a little, but paying hundreds of thousands over [the next best offer] is rare,” Vukasovic says.
If you loan money to a child, you can forgive the loan during your life or upon your death. Of course, you should only do so if you know you won’t need or want the money back in the future.
If you have loaned different amounts of money to your children, documenting the loans can help ensure an equal division of your estate. Some wills include a so-called “hotchpot” clause that accounts for all loans outstanding, so that one child does not receive a disproportionate gift or forgiven loan, as well as an equal share of the estate.
What are the tax implications of a gift or loan?
There are generally no tax implications to gifting in Canada. This differs from the U.S., which has a gift tax. U.S. citizens in Canada still need to be mindful of these U.S. implications. Only two situations may trigger additional income taxes for the parent: selling an asset at a capital gain or withdrawing an asset from a tax-sheltered account a registered retirement savings plan (RRSP). But gifting itself has no tax issues with adult children.
If a loan to your child was for investment or business purposes, forgiving it can have tax implications. This is in part because loan interest on funds borrowed to buy investments or fund a business is generally tax-deductible for the borrower.
As a result, forgiveness of such a loan may lead to a capital gain for the lender—if it’s forgiven during your life. If the loan is forgiven upon your death, there should generally be no tax implications.
If you loan money to a child to invest and the loan does not bear the Canada Revenue Agency prescribed rate of interest—currently 5%—the income may be attributed back to you and taxable to you. You can give an adult child money to invest and not be subject to attribution. But if you loan it and can call it back without charging the prescribed rate, the CRA will attribute interest, dividends, rental income and business income back to you. Capital gains, however, are taxable to the child.
Before you loan or gift money for a down payment…
When considering a gift or loan, you should first and foremost be sure that you are in a position to help your kids without risking your own financial security.
There may be family law, estate and tax implications to making a loan. Seek legal and tax advice from a qualified professional to protect yourself and your family.
Earlier this year, the HBP got a significant makeover. Here’s what’s new about the HBP, plus how you can use it together with other savings tools: a first home savings account (FHSA), a tax-free savings account (TFSA) and—recently introduced in Canada—EQ Bank’s Notice Savings Account. Read on for more details.
How has the Home Buyers’ Plan changed?
Home buyers should know about two major changes to the HBP. First, you can take out more money from your RRSP to buy or build a home—the maximum withdrawal amount has increased from $35,000 to $60,000, as of mid-April 2024. Couples can withdraw up to $120,000.
Second, you have more time to pay back your RRSP. As a temporary relief measure, home buyers who make an HBP withdrawal between Jan. 1, 2022, and Dec. 31, 2025, have five years to start repayment. Previously, the grace period was two years. The repayment period itself hasn’t changed—it’s still 15 years.
April 1, 2024, marked the one-year anniversary of the first home savings account (FHSA), a registered account that gives aspiring home owners $40,000 of additional tax-free savings room to save for a down payment. The FHSA has proven to be highly popular—as of April, more than 750,000 Canadians have opened one, according to the federal government.
“Home ownership is an integral part of most Canadians’ financial goals, and saving and planning are the cornerstones of achieving this dream,” says Mahima Poddar, group head of personal banking at EQ Bank. “The FHSA is an important tool in this journey, and it’s never too late to open one.”
The FHSA contribution limit is $8,000 per year, and you can carry forward up to $8,000 of unused room for one year. By 2028, Canadians who opened an FHSA in 2023 will have the full $40,000 of contribution room.
FHSA contributions are tax-deductible, and FHSA withdrawals are tax-free. Any money you earn inside the account is tax-free, as long as it goes towards buying a home. All of these benefits help buyers reach their savings goal faster.
Before locking into a familial loan, both parties must assess whether they are on the same page and are in a position to take on this type of agreement—along with knowing the power and relationship dynamics that could come with it. Here are six key considerations when borrowing from the Bank of Mom and Dad for your first home.
1. Is it a gift or is it a loan?
Determine if the financial help you’re discussing with your family is a gift or a loan. “Make sure there’s good communication with regard to the parent and the child about the nature of this,” explains Nicholas Hui, P.Eng, CFP, an advice-only Financial Planner at VAVE Financial Planning. “Is it a gift, or is it a loan? If it’s a gift, then I highly recommend having a ‘gift deed.’ A loan could be set up with some type of contract with payment terms and then seek legal advice to make it rock solid.” (More on gift deeds in a sec.)
If it’s a gift
If your parents gifted you money toward the down payment for your home purchase, then your mortgage lender may need proof of a gift deed or gift letter. In Canada, a gift deed is a legal document that transfers ownership of a property or asset from one party to another without exchanging money. This document confirms that the down payment amount from your parents is truly a gift and not a loan, which helps your lender verify the source—and nature—of the funds.
Hui also suggests discussing with your family whether it’s part of an early inheritance and, if not, whether other siblings should be informed to prevent future miscommunication over the division of assets, especially after your parents pass away.
If it’s a loan
If you’re considering a loan from a family member, discuss interest. If your parents decide to charge interest, it’s not necessarily a bad thing. For one, it could be beneficial to keep those funds “in the family” and support the Bank of Mom and Dad instead of a financial institution or mortgage company. And you’ll likely benefit, too, if the agreed-upon interest rate is less than prime.
Hui says parents could consider using the prime rate of Canada as a guideline (currently 6.95%) and then go a little lower or higher than that—but he says it’ll depend on the dynamics, loan amount and other factors.
Whether interest will be charged or not, Hui suggests having all aspects of the agreement—repayment timeline and terms of the loan—put in writing so everyone is on the same page.
2. Consider the tax implications
While there’s currently no “gift tax” in Canada, there are some tax implications to be mindful of. Interest charged on a loan is taxable income, so your parents will need to know that. “Like any investment, they’re loaning money to their child. If you pay them ‘income’ for that loan, it’s taxable,” Hui says.
For most Canadians, using a broker is the wisest choice to save money, as they have access to a wider selection of products and should have more experience in going through the application process than you do.
However, not all brokers are made the same. Some specialize in mainstream lenders, others are more familiar with getting you a mortgage if you have impaired credit, while others tend to source mortgages for investment properties. Again, ask around, search online. Look at reviews and get referrals if you can.
What to do before signing a mortgage contract
Before signing your mortgage contract it’s worth reading the fine print, to make sure everything’s above board. Are you getting the interest rate you signed up for? What about the cost of any lender fees, like an arrangement or booking fee?
One important aspect is your “prepayment privilege,” which means how much you’re able to overpay your mortgage every month, shortening the time it takes to pay off the loan. It’s good to know where you stand, because by paying too much you can be charged a prepayment penalty, which makes paying it off faster not worth it.
Buyers should view a survey of the property before signing the contract, as this can reveal if there are any issues with the home they’d need to deal with, and could even justify a renegotiation on the price. Surveys reveal the boundary of the home, so you have an idea of where you’re allowed to build on. In Canada most sellers take out the survey, known as real property reports (RPRs), and they should be scrutinized before you sign on the dotted line.
If you’re buying a condominium—often the most affordable option in cities—you’ll want to review documents on how it’s run. Generally you join a condominium corporation where you have to pay fees which are used to manage common areas of the building, so it’s a good idea to know what you’re getting into.
In the contract you should make sure any verbal agreements are in writing. For example if the seller informally agreed to leave some furniture as part of the purchase it’s best to make this official, just in case you get a nasty surprise when you move in.
When getting a mortgage it’s important to make sure you don’t overburden yourself and have a backup plan if something goes wrong. Like, could you afford to repair a major leak if that happened? Do you have a plan of action on how you’ll be able to repay the mortgage if you lost your job? In some cases the latter issue can be mitigated by either taking out insurance, or using a guarantor when applying for a mortgage.
For more information on real estate trends and the top neighbourhoods in each region, as well as insights on the top-ranked regions nationally, return to the national page or select a region from the drop down menu.
Zoocasa is an award-winning consumer real estate search portal. It uses data and technology to deliver an intelligent, end-to-end real estate experience.
In the table below, you’ll find the best Vancouver neighbourhoods for real estate purchases. To view all the data, slide the columns right or left using your fingers or mouse. You can download the data to your device in Excel, CSV and PDF formats.
Source: Zoocasa
Top three neighbourhoods in Vancouver
The steep price tag of homes in Point Grey is justified by their extravagant features. Sprawling mansions grace expansive properties that seamlessly blend into meticulously maintained streets. In spite of a 2023 benchmark home price of $2,532,842, Point Grey has seen steady price growth in recent years. In many Vancouver neighbourhoods, the benchmark home price stalled or fell over the last year, but Point Grey’s benchmark price was 6% higher than in 2022. It was 24% higher than in 2020 and 14% higher than in 2018, earning Point Grey a value score of 3.9.
Point Grey’s housing stock is mainly luxury houses, and many of Vancouver’s premier amenities are nestled within or near this opulent community. Everything is conveniently within reach, from top-tier schools like Queen Mary Elementary, Lord Byng Secondary, Jules Quesnel Elementary and West Point Grey Academy to exceptional recreational facilities like Jericho Tennis Club, Royal Vancouver Yacht Club and Brock House. While Point Grey may seem like an exclusive gated community reserved for the elite, a mix of residents calls this neighbourhood home, including working professionals, business owners, faculty members of the University of British Columbia, artists, university students and young families. One drawback of Point Grey is its accessibility score of 1.9, which is the third-lowest in Vancouver.
One of the more expensive areas of the city, Dunbar is located near the University of British Columbia campus. It’s home to a mix of high-income people and older residents who bought in years ago. That’s why you’ll find everything from enormous mansions to small bungalows in this neighbourhood. And it’s why Dunbar had a 2023 benchmark home price of $3,044,625. However, home prices aren’t increasing as fast as those in other Vancouver neighbourhoods. The benchmark price remained unchanged last year, and it was 12% higher than in 2020 and just 7% higher than in 2018. As a result, Dunbar has a value score of 1.8. Its neighbourhood economics score of 5.0 helped propel it to the number two spot on our list.
Residents in this area love the local golf course and their easy access to the forested trails of Pacific Spirit Regional Park. Indeed, the area has a lot of parks—as well as riding stables nearby. While there are several great public schools in Dunbar, the area is known for its private schools, including Crofton House and St. George’s. Dunbar has a family feel, with many baseball diamonds and soccer fields for extracurricular activities. It’s no surprise that it has Vancouver’s highest concentration of households with children (at 51%). Because the housing stock is mostly single-family homes, Dunbar is not as accessible as other areas of the city, but it still has a decent accessibility score of 2.9 out of 5.
Killarney is perched on East Vancouver’s south-facing slope, offering a scenic view of the Fraser River. Housing costs in this area are relatively more reasonable compared to downtown, offering home buyers a balance between affordability and proximity to the city centre. But having seen significant price growth in recent years, homes here are also a great investment. Killarney’s 2023 benchmark home price was $1,677,192, which was 1% higher than in 2022, 30% higher than in 2020, and 27% higher than in 2018. That works out to a value score of 4.4.
As one of the newer neighbourhoods in Vancouver, Killarney radiates a stronger connection to nature and a distinct lack of congestion. However, it falls short in terms of accessibility, earning a neighbourhood accessibility score of only 0.7. Known for its tranquility, Killarney features small shopping plazas and residential cul-de-sacs. With four public schools, including the notable Killarney Secondary—the largest secondary school in Vancouver—the neighbourhood has a large number of households with children (47%).
What’s happened in the Vancouver real estate market?
In 2013, Vancouver home prices followed a trajectory similar to those in other markets; the benchmark price continuously climbed until it reached a peak of $1,210,700 in July, and then it gradually declined, finishing the year at $1,168,700. Despite higher borrowing costs last year, the Vancouver real estate market still experienced price growth, with the benchmark price rising by about 5% from January to December. Most of this price growth occurred in the first half of the year, driven by an exceptionally limited supply of homes.
Demand for the more affordable home types stalled, while the luxury market saw less of a slowdown. “The price of luxury homes went up quite a bit last year,” says Geoff Pershick, a local eXp real estate agent. (Zoocasa, the author of this study, is wholly owned by eXp World Holdings.) “More homes sold for more money than expected, and it speaks to the influx of capital that is coming to the area.”
High interest rates deterred many sellers from listing last year and prompted many buyers, including cash buyers, to postpone their purchases. But better conditions are already emerging for 2024.
“The global wealth shift is ushering in an increasingly diverse group of buyers to Vancouver,” says Pershick. “Last year’s uncertainties might have slowed down [real estate] activity, but with interest rates finding their footing and a sense of stability returning, I’m expecting a resurgence of cash buyers.”
You’re 2 minutes away from getting the best mortgage rates in CanadaAnswer a few quick questions to get a personalized rate quote*You will be leaving MoneySense. Just close the tab to return.
What’s next for real estate in Vancouver?
The number of Vancouver home sales was up about 6% month-over-month in January, and up about 45% month-over-month in February, according to Greater Vancouver Realtors. If this momentum continues, the Vancouver real estate market is poised to have a stronger year in 2024 than in 2023.
“As interest rates decline, we’re going to see a surge in buyers alongside a decrease in sellers within the Vancouver market,” says Pershick. “This imbalance will drive property prices up and shape a competitive landscape for potential home buyers.”
Though buyer sentiment is improving from 2023, the supply of Vancouver homes has remained scarce since last year, pushing the market further into seller’s territory. “Greater Vancouver is consistently grappling with supply challenges, and I don’t think that will change in 2024,” says Pershick.
Between December and January, the benchmark home prices in Port Coquitlam and Coquitlam increased by about 3% and 2%, respectively. In Port Moody, the benchmark home price dipped by about 1%, but home prices will likely climb as the spring market kicks off.
You’re 2 minutes away from getting the best mortgage rates in CanadaAnswer a few quick questions to get a personalized rate quote*You will be leaving MoneySense. Just close the tab to return.
Burnaby, New Westminster and Richmond, B.C.
The city of Vancouver is bordered by Richmond to the south, and by Burnaby and New Westminster to the east. Burnaby and Richmond are B.C.’s third- and fourth-largest cities, respectively, each with a population above 200,000.
Best places to buy real estate in Burnaby, New Westminster and Richmond
In the table below, you’ll find the top neighbourhoods for real estate purchases in Burnaby, New Westminster and Richmond. To view all the data, slide the columns right or left using your fingers or mouse. You can download the data to your device in Excel, CSV and PDF formats.
Source: Zoocasa
Top three neighbourhoods in Burnaby, New Westminster and Richmond
Situated in Richmond, Hamilton is just north of Annacis Island and the Annacis Channel, and west of Queensborough. Hamilton’s 2023 benchmark home price was $947,750 as a result of a consistent and stable increase in property values. The benchmark was 3% higher than in 2022, 37% higher than in 2020, and 22% higher than in 2018. This trend contributes to Hamilton’s impressive value score of 4.6.
Hamilton is a distinctive neighbourhood with a blend of residential properties, predominantly single-family homes, alongside businesses and recreational facilities. It offers various amenities such as the Hamilton Community Centre, Hamilton Highway Off-Leash Dog Park, and the Bridges Marina. The neighbourhood boasts several parks, including the well-kept and popular Hamilton Community Park. Locals appreciate the trails that lead to the waterfront, a popular spot for dogs to take a swim. Hamilton has the highest percentage of households with children (57%) in this part of Metro Vancouver, by a significant margin. Families can send their kids to Hamilton Elementary School, the Choice School for Gifted Children, or Queen Elizabeth Elementary School. However, Hamilton has the third-worst accessibility score among the three cities, at 0.3.
In the southwest corner of Richmond lies the historic community of Steveston, where the powerful Fraser River meets the Pacific Ocean. Steveston is bordered by Williams Road to the north, the Fraser River to the south, No 2 Road to the east, and the Strait of Georgia to the west. The neighbourhood’s 2023 benchmark home price was $1,529,183, considerably higher than those of surrounding neighbourhoods. Home prices in Steveston Village have been on a slight upward trajectory. The benchmark home price was 1% lower than in 2022, but 28% higher than in 2020 and 17% higher than in 2018. As a result, Steveston has a modest value score of 2.0. However, it has by far the highest neighbourhood economics score in the region (5.0), which helped push it to the top.
So, what brings buyers to this neighbourhood? Following the closure of the fish canneries, significant residential development has transformed the area, with the emergence of new luxurious condominiums and townhomes reshaping the landscape. Residents benefit from outstanding local dining options, unique boutiques, a picturesque boardwalk that is popular among both tourists and locals, beach access, parks, playgrounds and biking trails—all enhancing Steveston’s charm. While primarily residential, Steveston has several parks near schools like Diefenbaker and James McKinney Elementary, along with the expansive Manoah Steves Neighbourhood School Park, which features four sports fields, three ball diamonds and a playground. The neighbourhood has one of the highest concentrations of households with children (49%).
Nestled in North Burnaby, the Brentwood Park neighbourhood has traditionally offered a balanced mix of affordable single-family detached homes and condominiums. With The Amazing Brentwood housing spectacular developments, Brentwood Park is poised to become one of the largest urban destinations in North America. In 2023, the neighbourhood’s benchmark home price stood at $881,425. Home prices in Brentwood Park haven’t risen as rapidly as those in other neighbourhoods on our list. The 2023 benchmark price was 1% lower than in 2022, 18% higher than in 2020, and 11% higher than in 2018. This translates to a value score of 3.2. But Brentwood Park has one of the highest neighbourhood economics scores, 3.1, in this part of Metro Vancouver, behind only Steveston.
The neighbourhood boasts stunning views of Burnaby Mountain and the North Shore Mountains. Beecher Park offers forested areas, a sports field, a children’s playground and Beecher Creek, a local salmon spawning habitat connecting to Still Creek. Eileen Dailly Leisure Pool & Fitness Centre is well known for its swimming pool, children’s water play area, sauna and steam room, weight room, and more. The area is also home to the McGill Branch of the Burnaby Public Library. Public schools in Brentwood include Brentwood Park Elementary, for kindergarten to grade seven, and Alpha Secondary School, which offers an advanced placement program allowing students to take college-level courses while still in high school.
What happened in the real estate markets of Burnaby, New Westminster and Richmond?
Real estate activity was stable in all three cities last year, and there was much less fervour compared to previous years. Home prices experienced modest price growth from January to December 2023, though this was due more to tight competition than increased demand.
Burnaby East experienced the most price growth, with the benchmark price rising about 7% from January to December. But the area is also the most expensive, with a December benchmark price of $1,157,400. New Westminster had the most affordable homes, with a benchmark home price of $815,600 in December, up about 4% from the beginning of the year. In Richmond, the benchmark home price rose from $1,109,200 in January to $1,153,400 in December—an increase of about 4%.
“Interest rates played a pivotal role in shaping affordability [in these areas], and there was a noticeable withdrawal from the market among potential buyers,” says Pershick. For the three cities combined, total home sales across all property types in 2023 came in below 2022 levels.
What’s next for real estate in Burnaby, New Westminster and Richmond?
Between December 2023 and February 2024, benchmark home prices in all three cities inched upward, suggesting a stronger start to the year than in 2023. Of the three, Richmond’s benchmark price increased the most, rising about 2% to $1,173,100 in February. Burnaby South has also experienced a decent increase, with the benchmark price rising by about 2% to $1,113,500 over the same period.
As of February, year-to-date sales for detached properties in Burnaby and Richmond are up compared to 2023. However, it’s Burnaby condo apartments that have gotten the most attention, with year-to-date sales up by about 19%.
Nestled in Markham, Vinegar Hill is encompassed by Highway 7 to the north, Highway 407 to the south, and streets situated just west and east of Main Street South, with the Rouge River serving as its natural border. The neighbourhood is a sought-after residential destination known for its picturesque settings and historical charm. In 2023, its benchmark home price was $1,126,400—which was 44% higher than in 2022, 72% higher than in 2020, and 40% higher than in 2018.
The community’s name is thought to have connections to either a cider mill located on the east side of the river valley or barrel makers who filled their barrels with vinegar to assess their straightness as they rolled down Markham Road. Slightly more than half (53%) of households in the area have children. Despite its desirability, Vinegar Hill has a relatively low accessibility score of 1.8—which is still higher than the other two top neighbourhoods in York.
Located in the northeast part of King Township, Pottageville stands out for its distinctive topography and environmental importance. It’s situated atop the elevated ridges of the Oak Ridges Moraine and within the Ontario Greenbelt corridor, and it features an abundance of ranch-style bungalows and older homes. Coming in second among our top three neighbourhoods in York, Pottageville had a benchmark home price of $1,657,917 in 2023, and a value score of 3.3. The benchmark price was 55% higher than in 2022, 27% higher than in 2020, and 113% higher than in 2018. With above-average levels of household income, education and home ownership, Pottageville has a perfect neighbourhood economics score.
It also has an above-average number of families with children, representing 56% of households. With easy access to the Greenbelt Route, a province-wide bike trail, it’s the perfect area for bikers. Pottageville may only have a general store, a gas station and a few small businesses, but there’s ample recreational space centred around Pottageville Community Park, which features a playground, a baseball diamond, tennis courts and soccer fields. There’s a train station a 10-minute drive away, making it easy to commute to Toronto, but the neighbourhood still only has an accessibility score of 0.4.
Concord benefits from excellent commuter highway access, with both Highway 407 and Highway 7 passing through. In 2023, Concord’s benchmark home price was $742,158, which was 2% lower than in 2022, but 9% higher than in 2020 and 54% higher than in 2018. The area has the second-highest value score (3.6) of our top three York neighbourhoods, and it does well on neighbourhood economics as well, scoring 4.6.
Concord residents often spend their time enjoying recreational and leisure activities. One popular destination is Vaughan Mills shopping centre, with its many retail stores, entertainment options and family-friendly attractions. Locals can also explore Concord’s natural beauty while visiting Boyd Conservation Area or Black Creek Pioneer Village. Many families live in modest brick detached homes and townhomes with single-car garages, which are popular in the area.
What happened in the York Region real estate market?
In 2023, York Region’s home prices fell less than those in other regions of the GTA. In January, the benchmark home price was $1,285,583, and by December, it had dropped 0.4% to $1,281,020. But with mortgage rates as high as they were last year, the market was never able to gain much momentum.
“Last year, as banks tightened their borrowing criteria, we saw a decrease in sales while average prices remained relatively flat or decreased just a little,” says Kirby Chan, a local eXp real estate agent. “It was tough,” he says, because even though prices came down a bit, interest rates were so high that mortgage affordability suffered.
Buyer uncertainty played a big role in slowing down home sales, as many people were hesitant to enter the market amid the anticipation of rising interest rates. The number of home sales in York stayed above 1,000 during the spring and summer, but trickled off in July. In December, there were only 612 sales.
What’s next for real estate in York Region?
January started off with a boost in home sales, suggesting the market is rebounding. Home sales were up about 27% from December and about 42% from January 2023.
“Buyers are coming out now into the market, and there’s a positive outlook on how the market is going to look this year,” says Chan. “But if buyers wait until interest rates come down, then prices will go up and their buying power will go down.”
York Region buyers could face more competition than last year, as would-be Toronto buyers are attracted by the area’s comparable affordability. “With the city of Toronto increasing property taxes soon, I think there’s a good possibility this will drive more buyers into York Region and areas like Markham, Richmond Hill and Vaughan,” says Chan.
Assuming mortgage rates go down and buyer confidence returns, Chan expects this year to be a strong one for York Region real estate. “Sales-wise and price-wise, I think we’re going to have a record year in 2024. Last year, the government raised interest rates to cool everything down, and so there were fewer sales. That means there’s a lot of buyers out there waiting, and this pent-up demand is going to push prices even higher.”
In the table below, you’ll find the top Halifax neighbourhoods for real estate purchases. To view all the data, slide the columns right or left using your fingers or mouse. You can download the data to your device in Excel, CSV and PDF formats.
Source: Zoocasa
Top three neighbourhoods in Halifax
For the second consecutive year, Cole Harbour is the top place to buy a home in HRM. Located east of Dartmouth, Cole Harbour is named after a local harbour. It has easy access to Highway 107 and Highway 111, making it an attractive location. Cole Harbour’s 2023 benchmark home price was $505,774, and that’s the result of consistent price growth in recent years. The benchmark price was 13% higher than in 2022, 66% higher than in 2020, and 69% higher than in 2018, giving Cole Harbour a value score of 4.0. It also has a neighbourhood economics score of 4.3, the third-highest in HRM.
The area has several schools—a convenience for the above-average 47% of households with kids. Residents love the area’s beaches and trails, including the Salt Marsh Trail and Rainbow Haven Beach Provincial Park. Cole Harbour is also a popular tourist destination: the quaint Cole Harbour Heritage Farm Museum and Fisherman’s Cove are two must-see stops. However, with the neighbourhood’s accessibility score of 0.6, you’ll likely need a car to get around.
View Cole Harbour real estate listings on Zoocasa.
Situated on the Eastern Shore of HRM near the Shearwater Canadian Air Force base, Woodside-Eastern Passage is a popular destination for military families due to its mid-sized community feel. Boasting a dozen eateries, convenient access to Halifax through the Woodside Ferry, the main Nova Scotia Community College campus and abundant character, this emerging neighbourhood proves to be a smart investment and a delightful place to live. Woodside-Eastern Passage’s benchmark home price was $432,486 in 2023, which was 18% higher than in 2022, 64% higher than in 2020, and 97% higher than in 2018. It’s the only neighbourhood in HRM with a perfect value score of 5.0.
The area features multiple recent subdivisions that provide a variety of housing options, including semi-detached and detached homes. There are many elementary, junior high and high schools that cater to the 45% of households with children. Like most places in HRM, you’ll likely need a car to live here, though.
Located a mere 10 minutes from the airport and 30 minutes from downtown Halifax, the Waverly-Fall River-Beaver Bank area is renowned for its scenic landscape, featuring numerous lakes, expansive open spaces and generously sized lots. It also has the most expensive homes of the top three neighbourhoods on our list, with a 2023 benchmark price of $666,815. That was 8% higher than in 2022, 62% higher than in 2020, and 83% higher than in 2018. Notably, Waverly-Fall River-Beaver Bank has the second-highest economics score on our HRM neighbourhoods list.
All homes in this area use septic systems; some rely on wells for water, while others are connected to city water. Residential lots are spacious and feature a range of traditional-style homes. Many residences boast lake access, and some even enjoy a lakefront setting. The neighbourhood has many sought-after schools. While the area may have limited amenities, it boasts a well-established canoe and kayak club, multiple daycare facilities, a post office and a convenience store. Living in Waverly-Fall River-Beaver Bank may necessitate owning a car, given its accessibility score of 0.1.
What’s happened in the Halifax real estate market?
Unlike the ups and downs of 2022, Halifax real estate prices did not sharply increase or decrease in 2023. The benchmark price consistently rose from January through the end of the spring market and reached a late peak of $530,900 in August. Following this, home prices softened before experiencing a modest rise in December, settling at a benchmark price of $511,600.
“In the first quarter of 2023, prices and sales were up, but then the market really slowed down after the spring,” says local eXp real estate agent Richard Payne. (Zoocasa, the author of this study, is wholly owned by eXp World Holdings.) “Properties were lingering on the market longer, and we didn’t see multiple offers on a home anymore. By the second half of the year, buyers had shifted to a more cautious stance, preferring to wait on the fence to see how conditions would evolve.”
As interest rates rose in the summer, buyers experienced some frustration, which morphed into confusion about what to expect from the market, says Payne. “Once buyers got confused, they didn’t feel confident to make any decisions, and this contributed to the slowdown in market activity.”
The uncertainty also influenced buyers’ budgets. “A lack of affordable options, especially in the $400,000 to $600,000 range, pushed many buyers to look out of the core and into more of the suburbs,” says Payne. “Homes in that range were getting more attention as interest rates rose.”
You’re 2 minutes away from getting the best mortgage rates in CanadaAnswer a few quick questions to get a personalized rate quote*You will be leaving MoneySense. Just close the tab to return.
What’s next for real estate in Halifax?
The benchmark home price in Halifax has increased by a little more than 1% since December, reaching $518,500 in January. With demand expected to rebound, price growth will likely continue, though that will depend on the mortgage rate outlook.
Payne expects the opposite of 2023 to unfold in 2024—with a quiet start to the real estate market, followed by an active second half. “In the beginning of 2023, activity was fairly up, and then as interest rate hikes were announced, it put the brakes on momentum,” he says. “This year, I anticipate a surge in activity in the second half of the year as buyers catch on to falling interest rates and rush back into the market.”
Buyers who were sitting on the sidelines last year may be better positioned to join the market in 2024. An influx in buyer activity might also encourage more sellers to list their homes, leading to a much-needed bump in the number of homes on the market.
The agency released its biannual housing supply report on Wednesday, which showed combined housing starts in the Toronto, Vancouver, Montreal, Calgary, Edmonton and Ottawa regions dipped 0.5% compared with 2022, totalling 137,915 units.
That was in line with the annual average of around 140,000 new units over the past three years. CMHC deputy chief economist Aled ab Iorwerth said the 2023 numbers came in “better than we thought.”
“We ended up being positively surprised by 2023. We were really quite concerned that higher interest rates were going to really have an impact,” said ab Iorwerth.
“They did have an impact, but it seems to have been on smaller structures, single-detached (homes) and so forth.”
Apartment starts grew 7% to reach a record 98,774 individual units last year. However, those gains were offset by declines in the number of new single-detached homes, which fell 20% year-over-year, due to weaker demand for higher-priced homes in an elevated mortgage rate environment.
More housing needed to address affordability gaps
The agency continued to warn about the need to ramp up housing construction to address affordability gaps and significant population growth in Canada.
It said housing starts are projected to decrease in 2024, despite the CMHC’s forecast that Canada will require an additional 3.5 million units by 2030, on top of what is currently projected to be built, to restore affordability to levels seen around 2004.
Its report cited rising costs, larger project sizes and labour shortages last year that led to longer construction timelines, prompting various levels of government in Canada to announce new programs aimed at stimulating new rental housing supply.
The credit lets home owners claim 15% of the renovation cost up to a maximum of $50,000, potentially allowing them to subtract as much as $7,500 from their income tax.
However, the mother-in-law suite must be self-contained.
“It has to have its own entrance, its own kitchen, bathroom, sleeping area,” noted Cestnick. “You can’t just sort of carve up one room of the house and then renovate it and claim the tax credit.”
House flipping rules
As of Jan. 1, profits from the sale of residential properties owned for less than a year are taxed as business income, rather than treated as a tax-free capital gain if it’s your primary residence.
“The government’s been concerned about people who are buying, fixing up and flipping properties. For many years people have been kind of abusing the rules and calling these properties their principal residences and really not paying any tax,” Cestnick said.
However, there are some key exceptions.
“The government doesn’t want a rule like this to require people to stay in bad marriages or to stay with somebody if there’s a threat of domestic violence,” Ewing said. A death, illness or disability might also allow for a sale soon after purchase that would be exempt from taxation.
New trust filing requirements
The reporting rules around trusts have expanded to include taxpayers who didn’t have to note them on their returns before.
