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The 5 Hottest Housing Markets Under $500,000

On Feb. 15, 2016, Canada's new mortgage rules kick in, mandating higher minimum down payments for homes priced higher than $500,000. But if you're planning to buy a home for less than that figure, you're in luck -- there's plenty of hot markets across Canada with average home prices of less than $500,000.

The countdown is on: on Feb. 15, 2016, Canada's new mortgage rules kick in, mandating higher minimum down payments for homes priced higher than $500,000.

But if you're planning to buy a home for less than that figure, you're in luck -- there's plenty of hot markets across Canada with average home prices of less than $500,000.

Below is our list of the five hottest markets where you can easily buy a home under that price threshold. Note that while the average home price for Canada overall is less than $500,000 -- $454,976, in fact, according to the Canadian Real Estate Association -- the price in certain markets is much higher. In Toronto, it's $630,876; in Vancouver, $947,334. So good luck buying in those markets under the magic number.

First, here's a quick recap of the new regulations.

The existing five per cent minimum down payment for the first $500,000 will remain the same, but after Feb. 15, the minimum down payment for the portion of the home priced above $500,000 will be 10 per cent.

For example, if you're buying a home for $500,000 or less, the minimum down payment is the same -- $25,000 -- under the existing and new regulations.

If you plan to buy a home for between $500,000 and $1 million, you basically have four choices:

  • Buy before Feb. 15 to avoid the new requirement, to still be able to put down five per cent
  • Delay your purchase until you've saved the additional funds for the new, higher down payment
  • Somehow come up with the additional funds now, say, with help of the Bank of Mom and Dad, or
  • Buy a home that is priced at less than 500,000. Depending on the market you're in, that could mean you'd then be looking at condo, instead of a lowrise home

If you're looking at a house that's $600,000, until Feb. 15, you can put down $30,000. After that date, you'll have to come up with $35,000.

At $700,000, the existing and new requirements are $35,000 and $45,000, respectively.

For another example, if you're buying a property for $800,000, you would need to make a down payment of five per cent on the first $500,000 ($25,000) and 10 per cent on the remaining $300,000 ($30,000). This would be equal to a total down payment of $55,000, or 6.9 per cent of the total purchase price, or an increase of $15,000.

Here, then, is our list of the five hottest markets in Canada -- just how hot determined by price growth -- where you can still buy a home for less than $500,000.

1. LONDON, ONT.

Q3 2015: $293,344

Q3 2014: $263,668

Year-over-year % change: 11.3

2. OSHAWA, ONT.

Q3 2015: $364,366

Q3 2014: $332,151

Year-over-year % change: 9.7

3. WHITBY, ONT.

Q3 2015: $473,400

Q3 2014: $431,954

Year-over-year % change: 9.6

4. KINGSTON, ONT.

Q3 2015: $342,481

Q3 2014: $313,847

Year-over-year % change: 9.1

5. HAMILTON, ONT.

Q3 2015: $395,404

Q3 2014: $364,639

Year-over-year % change: 8.4

And here are five more that are also worth a look:

6. WINDSOR, ONT.

Q3 2015: $211,973

Q3 2014: $196,021

Year-over-year % change: 8.1

7. NIAGARA-ST. CATHARINES, ONT.

Q3 2015: $289,277

Q3 2014: $268,420

Year-over-year % change: 7.8

8. KITCHENER-WATERLOO CAMBRIDGE, ONT.

Q3 2015: $346,333

Q3 2014: $326,938

Year-over-year % change: 5.9

9. VICTORIA, B.C.

Q3 2015: $478,570

Q3 2014: $456,344

Year-over-year % change: 4.9

10. KELOWNA, B.C.

Q3 2015: $468,310

Q3 2014: $447,305

Year-over-year % change: 4.7

Source: Royal LePage House Price Survey

Read more on how to prepare for the new down payment requirements.

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