Anyone searching for valuable real estate in Canada should steer clear of the Greater Toronto Area and Greater Vancouver.

MoneySense's Where to Buy Real Estate in Canada 2023 report has placed the GTA 42nd out of 45 cities in terms of value and buying conditions, while Vancouver took the 44th spot. Mississauga appears between the two, while Oakville-Milton was ranked the worst place to purchase property in Canada this year.

Created in partnership with Zoocasa, the rankings are based on benchmark home prices and recent real estate price growth, with each city receiving a value score out of five.

With a 2022 benchmark price of $1,195,950 -- a staggering $403,092 above the national average -- and a three-year growth rate of 54%, the GTA earned a value score of 1.70 out of five. Greater Vancouver's benchmark price of $1,199,242 and three-year growth rate of 33% earned the region a value score of 1.11.

Mississauga received a value score of 1.23, while Fraser Valley rounded out the five least-valuable cities with a score of 2.20.

At the bottom of the list, Oakville, with a benchmark price of $1,401,042 and a three-year growth rate of 51%, received a value score of just 0.97.

"Real estate demand fizzled last year, primarily because of rising interest rates, low inventory, and reduced buyer appetite," the report reads. "Even with declining prices, properties became progressively less affordable as interest rates increased a staggering seven times in nine months."

Home prices reached record-highs across Canada in early 2022 before the Bank of Canada began hiking interest rates in March. Prices plummeted thereafter in most major markets, and many cities ended the year with "weak" year-over-year price gains.

However, smaller markets and those that border larger cities continued to see heightened demand throughout the year. As a result, these minuscule municipalities are where the best value can be found.

With a benchmark price of $320,817 -- a cool $472,041 below the national average -- a three-year growth rate of 84%, and a five-year growth rate of 102%, Greater Moncton was deemed the best place to buy real estate in Canada in 2023. The city earned a near-perfect value score of 4.75.

Sault Ste. Marie nabbed second place on the list, with a value score of 4.68. The city has a lower benchmark price, at $292,208, but a simultaneously lower three-year growth rate of 75%. North Bay followed, with a benchmark price of $413,252, three-year growth rate of 83%, and value score of 4.23.

Fredericton and Saint John rounded out the top five, respectively, with value scores of 4.04 and 4.03.

While demand dwindled in 2022, the BoC has paused its incessant rate hikes, luring sidelined buyers back to the market.

"The 2023 market is dependent on affordability," said Lauren Haw, broker of record and industry relations officer at Zoocasa. "If interest rates decline, buyer sentiment should shift in a more positive direction."

National home sales edged up in February and March, marking the first two consecutive monthly increases in a year. However, new listings have hit a 20-year low, leading to the tightest market conditions since April 2022.

MoneySense expects that Canada's housing supply shortage will persist throughout 2023 and beyond. Record levels of immigration will drive demand, which will in turn drive up prices, particularly in markets already facing low levels of inventory.

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