Tips for Newcomers to Canada Buying a House

“Selling a pre-construction condo is done through a process called an assignment sale. This is due to the fact that you are, in effect, assigning the contract or the right to take possession of the unit at a future date to another person, as opposed to outright selling the property to that person.”

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7. Make an offer on the home you love

After touring homes with your REALTOR®, you hopefully found a home you love. Once this happens, it’s time to make an offer. Work with your REALTOR® to determine the best offer strategy, including the proposed purchase price, conditions, deposit amount, closing date, and more. Depending on the market, you may need to make an offer quickly if you don’t want to lose the home. 

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8. Finalize your mortgage loan, close the deal, and move in!

Once the seller has accepted your offer, you can put the wheels in motion by finalizing your mortgage loan (keep in mind that this process can take up to two weeks) and signing on the dotted line. We recommend hiring a real estate attorney to review all closing documents, including the purchase agreement. During this time, you may also wish to have a house inspector and/or appraiser visit the home to ensure there are no major issues. After everything is clarified and your lawyer gives you the go-ahead, it’s time to move in and enjoy your new home in Canada! 

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Key Considerations That May Impact the Homebuying Process for Newcomers

As a newcomer to Canada, there are many factors that can impact the homebuying process. Taking the time to carefully consider some of these factors is important before making such a major purchase. Review the list of questions below and reflect on each to help you decide whether buying a home in Canada is right for you.

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Where do I want to live in Canada?

First and foremost, you should devote lots of time to thinking about where in Canada you want to live. Toronto, Canada’s largest city, is often a popular destination for new immigrants. However, it’s also one of the most expensive in which to buy a home. If you’re interested in moving to the Greater Toronto Area (GTA), you can find help choosing the right neighbourhood for you here. Vancouver is another major city that comes with a high price tag. Unsurprisingly, smaller cities outside of Toronto and Vancouver, along with rural areas, tend to be significantly cheaper. If you are willing to live outside of major urban areas, newcomers should have no trouble finding a nice home. However, if you have your heart set on Toronto, Vancouver, or the like, you will need to prepare for the financial realities of this, with housing prices standing at nearly double the national average. If such prices seem out of reach but you are attracted to city living, you may consider slightly smaller but still economically vibrant cities like Ottawa, Edmonton, or Winnipeg. Alternatively, if you want to have access to metropolises like Toronto, you can opt to live in a surrounding suburb that may be more affordable, like Markham, Mississauga, or Hamilton. All three cities offer close proximity to Toronto, have large immigrant populations, and ample economic opportunities with less daunting housing prices. 

Overall, when thinking about where you want to live in Canada, you will need to consider your lifestyle and budget. We also suggest reaching out to friends, co-workers, or neighbours to learn more about Canada’s various cities and regions. Hearing about other people’s experiences in different parts of Canada might help you decide which city is right for you. 

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What type of home do I want to buy in Canada?

Another consideration when buying a home in Canada as a newcomer is what type of home you want to buy. There are many types of properties, from condos to single-family homes, and each has its own unique benefits and drawbacks. Of course, they also vary in price, and therefore, your budget may dictate the type of home you buy. Some of the most popular types of homes in Canada are as follows: 

• Condo: A condo is a unit within a larger building (sometimes a low- or mid-rise building and other times a highrise building). When you buy a condo, you own your specific unit, not the building. However, you gain access to the building’s amenities, which may include 24/7 security personnel, a sauna, a fitness room, a swimming pool, and more. Also when you buy a condo, all maintenance is handled by the condo association, which makes them extremely convenient. 
• Single-family/detached home: A single-family or detached home is a stand-alone structure that shares no walls with neighbours. You own the home and the land it’s on and are responsible for all maintenance and upkeep. Single-family homes tend to be the most expensive type of property in Canada.
• Semi-detached home: A semi-detached home is a structure with its own land and entrance but it shares a wall with a neighbouring home.
• Townhouse: A townhouse is a home that is attached to other homes, usually on both sides. They are often smaller than single-family homes.
• Duplex/triplex: A duplex or triplex is a single building that consists of multiple units (two units for a duplex or three for a triplex). Duplexes and triplexes can be a great option for homebuyers as it allows them to occupy one unit while renting out the other(s).

We put the real back in real estate.

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Should I rent or buy a home in Canada?

One final consideration that newcomers to Canada must consider is whether they should rent or buy a home. Even if the ultimate goal is homeownership, renting might make the most financial sense upon arrival in Canada. A 2019 survey conducted by Royal LePage found that newcomers live in Canada for an average of three years before purchasing a home. Again, although it is understandable that newcomers would be eager to enter the Canadian real estate market, many immigrants may not have the means to do so for some time (especially when you consider the obstacles to buying a home as a newcomer, like higher interest rates due to lack of credit history). 

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Renting a home before buying in Canada might make sense in several scenarios. First, if you only recently arrived in Canada, you may not know what city you want to live in. If you’ve never lived or travelled here before, it can take some time to determine which city or region is right for you. For example, you may initially plan to live in Ottawa but end up deciding that the weather or economic opportunities do not align with your lifestyle. Alternatively, you may arrive in Canada without a job and end up getting a job in an entirely different Canadian city. Generally speaking, renting a home versus buying may make sense in the following situations: 

• You are not certain what city or neighbourhood you want to live in;
• You have yet to secure a permanent job;
• You expect your financial situation to change over the next year or so; or
• You need time to save up for a down payment.

In contrast, buying a home versus renting might make sense if you know where you want to live, have already secured a job, and have the means to do so. For example, if you are moving to Canada to live with family or friends who are already established here, or for a specific job or educational opportunity, then you may be quite certain about where you want to live. Typically, it makes sense to buy a home if you plan to live in a city for a minimum of three to five years. Overall, so long as you have the means, buying a home in Canada comes with plenty of financial benefits that make it an attractive option. For example, you can increase your net worth and build your equity rather than pour your money into the rental market. There may also be a sense of pride and accomplishment that comes with owning your own home in Canada.

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Tips for Saving Money on a Home as a Newcomer to Canada 

The experts at Wahi have put together a few tips to help you save money on a new home as a newcomer in Canada.

• Offer alternate proof of creditworthiness: If you’re a newcomer to Canada, then chances are you don’t have much of a credit history. Though depending on your age and what country you’re immigrating from, you may have an impressive credit history back home. While you won’t be able to transfer it to Canada, you may still be able to use your financial history to your advantage. If you have documents or references that can prove a history of positive financial behaviour, ask a mortgage lender if they will take it into consideration. Alternatively, if you start out renting a home in Canada, you can also ask a landlord if they might accept your alternative credit history.
• Research, research, research: Any time you buy a home, but especially if you are entering an entirely new housing market, research is crucial. Do this research yourself or team up with a REALTOR® who can do a comparative market analysis for you. Understanding market conditions and the average cost of homes in certain neighbourhoods will help you avoid overpaying for a home. 
• Take advantage of government resources: As a newcomer to Canada, you have access to a special set of resources. The federal government offers a wide range of newcomer services that can help you find a job, learn the language, or even find and buy a home. You can find a complete list of these services here. You can also learn more about finding accommodation as a newcomer here.
• Consider overlooked neighbourhoods: Our last tip for saving money on a new home in Canada is to consider overlooked neighbourhoods. Generally speaking, the more popular a neighbourhood, the more expensive the cost of living. This means that considering homes outside of the most popular areas in places where fewer people are looking might be your best bet. For example, you could look for a home somewhere that’s a bit farther from the downtown or in neighbourhoods less popular with families. Consulting with a REALTOR® who knows the local market can give you valuable insight into up-and-coming areas that other buyers might be overlooking.

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