The Neighbourhood Dilemma: Can Canadians Have Both Affordability and Liveability?

Neighbourhoods evolve. They are a living, breathing thing, growing and changing as people come and go. So, what attracts people to a neighbourhood in the first place? This question was a prevailing theme of RE/MAX’s 2024 Liveability Report, which evaluated Canadians’ most-valued liveability criteria, and based on that, the neighbourhoods that suited them best. From a technical standpoint, the findings were clear. According to a Leger survey commissioned by RE/MAX, affordability ranked as the #1 priority for 44 per cent of Canadians. But what does that look like at ground-level?

Indeed, some of the report’s “most liveable” neighbourhood selections were challenged for issues such as safety concerns, poverty and drug use.

This begs some important questions when it comes to finding the best place to live, particularly for first-time buyers. Is it possible to achieve affordability alongside access to other liveability factors, like greenspace, public transit and amenities? How much will first-time homebuyers have to compromise to be able to afford a home? Is it possible to have it all?

The answer is yes, you can have it all, but likely not on your first go around.

The Evolution of Neighbourhoods

Some of the most coveted neighbourhoods in Canada didn’t start out this way, but with residents’ commitment and investment in local businesses, housing and community, these areas evolved into what are now considered some of the best neighbourhoods to live.

Let’s look at Canada’s biggest city and housing market – Toronto. Historical neighbourhoods such as Parkdale, Cabbagetown and Leslieville have experienced distinct cycles: peaks of development and flourishment, as well as challenges like crime and drug use. However, their relative affordability and proximity to the downtown core made them a great place to call “home.” Over the years, more people and businesses came and stayed, and these neighbourhoods transformed into some of the city’s coolest places to live, work and play, representing the pinnacle of home ownership for many.

But with increased liveability (and demand) comes a cost: housing prices in these neighbourhoods are a far cry for the typical entry-level price point.

This brings up an important point in the journey to home ownership. Canada’s prolonged low-interest rate environment has allowed many young homebuyers to seemingly bypass those first crucial steps that their predecessors had to take to climb the “property ladder.” Borrowing was cheap and many young buyers took advantage of that, to buy a starter home that was much more “turn-key.”

However, today’s higher interest rates, the mortgage stress test, and high housing prices are a tough pill to swallow for first-time homebuyers.

Seventy-three per cent of Canadians believe home ownership is the best investment they can make, but getting into the market often comes with an expectation that you can have it all, at an entry-level price point. This is not usually the case, and oftentimes, coming to terms with that is step one on the journey to ownership.

Getting into the housing market has always meant making compromises. Buy what you can afford now, save money, build equity, and upgrade to a nicer home or neighbourhood (or both!) when you’re financially ready. That’s how it is done. And if you’ve chosen wisely and stayed put through some of the challenges, maybe that up-and-coming neighbourhood will evolve into your dream neighbourhood in due time.

Supply and Demand: It’s Basic Economics

The reality is that when a neighbourhood finally comes into its own, it usually becomes unaffordable. The answer to achieving balance lies in more visionary and practical planning – starting at the neighbourhood level, with design and infrastructure – to make housing more affordable and available to all Canadians.

Every neighbourhood has its ups and downs. Choosing the right one is a question of what you, as a buyer, are willing to accept.

For several years now, RE/MAX has advocated for a national housing strategy to address the root of Canada’s affordability challenges – lack of housing supply. But focusing just on supply is not enough. Our housing needs to be more visionary and diverse, for Canadians to truly “have it all.”

We need a housing strategy that prioritizes liveability for all Canadians, offers a good return on investment and ensures balance between affordability and quality of life, for the long term. Without visionary solutions, Canadians will have no choice but to continue compromising on safety, walkability, good schools, access to medical care and more, just to be able to afford a home.

Until that happens, Canadians should accept that the balance between affordability and liveability may be skewed. In the meantime, homebuyers can look to area experts, like professional real estate agents, to guide them to the neighbourhoods that best meet their needs and have the most of what they’re looking for.

In developing the Liveability Report, RE/MAX brokers were instrumental in determining whether the local nuances of each neighbourhood identified by our third-party analytics partners truly aligned with Canadians’ liveability criteria. If you are evaluating a new neighbourhood, consider connecting with a local agent to help you find the neighbourhood that fits your life and meets all your liveability criteria.

To learn more and view the rankings, check out the 2024 Liveability Report.