Location matters: Adding up the full costs of home optionsNew research from RBC and the Pembina Institute reveals the impact of transportation costs on homebuying decisions

Jan. 21, 2015

TORONTO — Homebuyers may find that their options look very different once transportation costs are factored in, according to a new report from RBC and the Pembina Institute.

Location Matters: Factoring location costs into homebuying decisions examines the full costs of home location options based on case studies involving actual homebuyers. The report shows that seemingly less expensive homes located farther from the workplace can actually cost more when transportation and commuting expenses are factored into the equation.

Four Greater Toronto Area homebuyers took part in the study. Each homebuyer was presented with up to five home options in various locations. The costs and benefits of each location were then analyzed for the report, including factors such as commuting times and neighbourhood walkability.

These case studies illustrate how personal priorities and lifestyle preferences influence the homebuying decision, and how certain trade-offs affect a home’s affordability. In other words, the research looks at the costs of where homebuyers choose to live, not just what they choose to live in.

RBC, in conjunction with the Pembina Institute, has also introduced an interactive online tool that helps homebuyers better understand the financial impact of location and transportation when making their decision.

Quick facts

  • Transportation math: In one homebuyer case study, the full costs (including both housing and transportation) for a home in Milton were $1,000 higher per month than for a home in Port Credit, even though the “sticker price” of the home in Milton was $180,000 lower.
  • Suburbs for the family: In another case study, a family could cut their transportation costs by half — a monthly savings of more than $1,000 — by choosing a suburban location where they only need one car.
  • A previous RBC-Pembina report revealed that if cost were not a factor, 81 per cent of GTA residents would choose to live in a walkable and transit-accessible neighbourhood, even if that means giving up a larger detached home with a yard.


“Most homebuyers acknowledge that choosing a cheaper home often means spending more time and money commuting. But when we actually crunch the numbers, these costs can be startling. A seemingly cheaper home in a distant location can actually be less affordable than another option with a higher sticker price.”
—Cherise Burda, Ontario Director, Pembina Institute

“Homebuying math is never a simple one-plus-one equation. There are a number of factors to be considered, and the total cost can vary by simply adjusting location and transportation costs. Before entering into negotiations, it’s important to evaluate all variables to make sure the total cost fits into your budget.”
—Erica Nielsen, Vice President of Home Equity Financing, RBC


Visit the Pembina Institute’s website to download a copy of the Location Matters report. Visit RBC’s website to access the interactive version of Location Matters.


Cherise Burda
Ontario Director, Pembina Institute

Bernard Rudny (English / français)
Communications Lead, Pembina Institute

Ka Yan Ng
Communications Manager, RBC


Report: 2014 Home Location Preference Survey: Understanding where GTA residents prefer to live and commute

Policy Supplement: Location-Efficient Choices for GTA Homebuyers

Report: Priced Out: Understanding the factors affecting home prices in the GTA


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