Owning a house allows you to build equity and gives you more control over your living expenses when compared to the constantly changing rental rates.
Before you start shopping the real estate market, though, it’s a good idea to acquaint yourself with the different types of houses in Canada.
Below, I’ll give you a detailed breakdown, so you can figure out which type of house best fits your needs.
Average Home Prices In Canada
The Bank of Canada has been aggressively hiking its interest rate. Economists predict that this could dramatically reduce the average home prices in Canada in 2023. For those who are financially prepared, this could be the perfect time to find a deal on your dream home.
Types Of Houses In Canada
In general, there are four types of houses in Canada:
- Detached houses
- Semi-detached houses (condos/condominiums & townhouses)
- Apartment buildings
- Movable houses
Within each of these categories, you’ll find several sub-categories that are worth noting as well. Below, I’ll explain everything you need to know so you aren’t left scratching your head when you’re speaking with your realtor.
In 2021, single detached homes accounted for 52.6% of all homes sold in Canada, making them the most popular option for home buyers. A detached house is a fully independent unit that doesn’t share a wall with any other house.
Many detached houses feature their own integrated garages (built into the home), and private front and back yards, and have their own utility connections that aren’t shared with other homeowners.
Depending on the neighbourhood you live in, you may have to pay dues to a homeowners association to help maintain common areas in the neighbourhood, such as:
- Street lamps
- Brief: Detached home on a private lot with two full storeys
Two-storey detached houses offer the most to buyers in terms of overall space. Each house features a full top storey (typically with multiple rooms) in addition to the primary bottom story.
This is perfect for those who have a family, plan on starting a family or require extra space for an in-house studio, office, or storage.
- Brief: Detached home on a private lot with one full storey and a half storey (usually one room) above
One-and-a-half-storey detached houses look similar to two-storey detached homes.
The main difference is that the second floor doesn’t span the width of the entire building. The second storey typically only consists of one room, often placed over the garage unit.
3. Split-Level Home
- Brief: Detached house with the main floor split between two lower and higher levels
Split-level homes are commonly seen in hilly regions, where homes are built on a slope or steep incline. This unique style of building allows builders to make the most of the space, without having to build a higher structure on an incline.
Typically, split-level detached homes feature a main level with the kitchen, living, and dining rooms.
The other side of the home will feature a split-level with short flights of stairs leading up towards bedrooms and down towards a basement, garage, or recreation room.
- Brief: Typically small, detached homes that feature large porch or patio areas
Compared to bungalows and other detached homes, cottages can be quite small. They’re often found close to nature, on farms, and in regions that feature a lot of nature.
Cottages may only have one or two small bedrooms and a large open living space that encompasses the kitchen, living, and dining room.
Cottages have become quite popular in recent years, as they’re highly sought-after AirBnB rentals.
- Brief: One-storey detached home, with all of the rooms on one floor
Bungalows are, by far, one of the most common styles of houses in Canada. These homes feature just one storey, with a large central living space and hallways to rooms on either side of the home.
Depending on the design, it’s also common for bungalows to have an integrated garage as well. These homes are perfect for singles, couples, or new families.
Semi-detached houses are housing units that share a common wall (or even two walls) with neighbouring housing units.
This is the key way in which they differ from detached houses. Semi-detached units and row houses accounted for 11.5% of Canadian home sales in 2021, making them the second-most-popular option for home buyers.
Often, semi-detached homes may share a common front yard, sidewalk, and parking spaces.
6. Stacked Townhouse
- Brief: One or two-storey townhouses “stacked” on top of each other
Stacked townhouses are commonly found in cities and areas that feature a more modern, urban design. This type of semi-detached home may just have one storey.
More often than not, though, stacked townhouses typically feature two storeys. This often gives the space and appeal of a two-storey home, while maximizing space and efficiency.
7. Freehold Townhouse
- Brief: Townhouses in which the homeowner owns the land that the unit is built on
Freehold townhouses are often found in older neighbourhoods. Compared to other semi-detached homes, a freehold townhouse offers the most autonomy to the homeowner.
The condo owners are each responsible for maintaining their part of the property, as there usually isn’t a homeowners association or a larger condo corporation to pay condo fees to.
8. Condo Townhomes
- Brief: Condo buildings owned by a condo corporation that maintains the common properties
While condo townhomes don’t offer as much autonomy to owners as a freehold townhouse, the homeowner doesn’t have to worry about as much property maintenance.
A condo corporation owns these semi-detached houses and imposes monthly condo fees on the owner of each unit to keep up with common area maintenance.
Often, the monthly condo fee charged by condo townhomes contributes towards public amenities, such as swimming pools, a clubhouse, or playgrounds.
9. Row Houses
- Brief: Semi-detached condo units that feature the exact same facade
If you enjoy uniformity, then a row house might be for you. Although they’re often referred to as condos, row houses have one key difference – the face (facade) of each unit looks the same. The only way to differentiate the units is by the number over the door.
These are commonly found in cities and modern developments. In most cases, a condo corporation owns the row housing development.
A “plex” is a multi-family housing unit that features two, three, or four separate housing units in the same building. These are very popular in Montreal and are often used as Airbnb rentals or individual rentals.
Due to the unique design of these rentals, it’s common for the property owner to live in one unit (usually the upper level) while renting out the lower levels to tenants or short-term visitors.
This allows the owner to save money on property taxes. Each unit should have its own separate entrance.
- Brief: Multi-family structure with two units
Duplexes are some of the smallest multi-family homes on the market. They typically feature a split level, offering a full bottom floor and a full top floor, each separated with its own entrance.
Some modern duplexes have been renovated to combine the top and bottom floors to create a large single-family unit.
- Brief: Multi-family structure with three units
Triplexes are just like duplexes, but feature three separate housing units stacked on top of each other.
The top two units usually feature an exterior or interior staircase leading up to them. Some of the more modern triplex units may even feature an elevator for convenience.
- Brief: Multi-family structure with four units
Fourplexes feature four separate living units, which are usually stacked vertically. At this size, fourplexes look more like small apartment buildings.
However, unlike traditional apartment complexes, a fourplex is usually a standalone property on its own small plot of land. Fourplexes may also offer greater outdoor space compared to duplexes and triplexes.
Apartment-style homes are different from rental apartments, which are leased on a monthly basis. These single-family units are typically cheaper (although smaller) than buying a detached house, and are typically found in busy downtown areas, where space is limited.
They’re often marketed as small bachelor units due to the fact that most aren’t designed to house an entire family and may only have one or two bedrooms.
13. Low-Rise Apartment Building
- Brief: Apartment units in a building that has fewer than five storeys
Low-rise apartments are commonly found in suburbs and the outskirts of the city. The advantage of these units is that it’s a bit easier to move in, as you won’t have to climb so many stairs.
Each unit will typically feature its own front-door entrance, and may even feature a private outdoor patio.
14. High-Rise Apartments
- Brief: Apartment units in a building that has more than five storeys
These housing units are often treated as rental apartments. However, it’s also common to find individual units for sale in larger cities, where there are fewer detached homes for sale.
One of the advantages of high-rise units is that residents may have access to amenities such as rooftop swimming pools or an indoor gym. Of course, these amenities also come with monthly fees.
Last but not least, we have movable houses, which only accounted for 1.3% of total home sales in 2021.
Moveable houses are typically small, independent units that may be moved to new locations or lots.
15. Mobile Homes & Manufactured Homes
- Brief: Manufactured home built on wheels and set up on a lot
Mobile homes and manufactured homes look very similar on the outside. The main difference is the building codes which they’re each designed for.
Mobile homes tend to be very slim and are designed to be easily towed from one location to the next, similar to a large caravan trailer. Most mobile homes are very old, as building codes have changed to favour manufactured homes instead.
Manufactured homes are a bit wider and more spacious. Although they may look like mobile homes and are often towed to the site, they aren’t designed to be easily moved after set-up (due to improved quality and safety standards).
To move a manufactured home from one site to another, the homeowner must obtain a special building permit from the city and work with licensed contractors.
16. Floating Home (On Water)
- Brief: A small housing unit build on a floating dock
Floating homes aren’t very common, but they are one of the most interesting types of houses in Canada. They’re typically found along the banks of the Great Lakes or in the picturesque fishing city of Victoria and around Vancouver Island.
Since they don’t have a solid foundation, floating homes typically only have one floor. Fresh water and power are usually piped in from the mainland just like it is for boats docked in the marina.
However, some floating homes may feature an off-grid design with advanced water filtration systems and solar power.
According to data from Wowa, one of the biggest real estate agencies in the country, detached homes are the most common type of housing in Canada. Who can argue with a spacious home, a private yard, outdoor space, and a personal driveway?
How much mortgage you can afford depends on your annual household income, your monthly expenses, and how much you have saved up for a down payment.
Most banks require buyers to put a down payment of at least 5% down on homes valued under $500,000, and up to 10% down on increments over $500,000.
As a basic example, you would need to provide a $20,000 down payment on a $400,000 home, to apply for a $380,000 mortgage to cover the remaining balance.
Of course, other factors can affect this as well, such as:
- Your income
- Existing debts
- Monthly expenses
- Your credit score
- Your income history
One of my favourite platforms that I often recommend to home buyers is Homewise.
After you enter a bit of personal information, the Homewise algorithm will automatically pair you with the best rates offered by Canadian lenders.
Here’s a quick overview of the key steps you’ll need to take before buying a house in Canada.
Before approving you for a mortgage, most banks want to see that you have a steady history of verifiable income.
In general, you’ll want to have at least two years of verifiable income, without unexplained employment gaps. This can vary from case to case, though.
According to Scotiabank, home buyers should have a minimum credit score of 680 before applying for a mortgage. If you don’t know your credit score, then you can get your free credit report with one of these resources.
This should be relatively easy to achieve if you’re willing to clean up derogatory items on your credit score and take actionable steps toward building your credit.
Next, you’ll want to refer to the list above and figure out the type of house that best fits your needs. If you plan on starting or growing your family, for instance, you may need to search for a larger two-storey detached house.
Before you start working with a realtor, it’s a good idea to search your local market to get an idea of the average home price and what type of neighbourhood you want to move in. This will help you figure out how much you’ll need to save for your down payment.
Next, you’ll need to start saving money for your down payment. It’s always best to save a little bit more than you planned to account for closing costs, moving expenses, and other costs.
Check out my guide on frugal living in Canada to learn easy ways that you can start saving today!
With your down payment secured, it’s time to get financed for your home! You can visit your bank and discuss mortgage solutions with a representative or you can work with an online mortgage broker to compare lending rates from different financial institutions.
My favourite online mortgage broker, by far, is Homewise. The platform doesn’t require an initial credit check and helps you negotiate with a network of over 30 lenders.
As you’re applying for your mortgage, you’ll probably want to work with a realtor to help you find your home.
Realtors will work with you to find a home that best fits your unique needs and will provide you with an unbiased opinion, helping you analyze each potential home before you move forward with the purchase.
Closing costs are the various administrative and legal fees that you’ll have to pay when purchasing your home.
Depending on the value of the home and its location, these can range between 1.5% and 4% of the home’s total value.
This amount is usually factored into your mortgage, but it can increase the down payment you’ll need to pay.
By now, you should have a solid understanding of the types of housing options that you’ll be able to choose from when buying your home.
The important thing is that you take your time, do your research, and start saving up for your down payment.
Look for a complete list of real estate investing options in Canada here.