Soaring new single-family home prices are making renovations the best option for families seeking an affordable choice. Recent data show new single-family homes prices soared 16% in the GTA in 2012 even as prices and sales softened across the whole market.

Real estate research company RealNet Canada Inc said provincial policies aimed at curbing urban sprawl mean that the price of an average new home here is now more than $632,000.

People are attracted to new homes because the older existing stock lacks the features and space they expect. But with older and especially unrenovated homes languishing on MLS, this is an opportunity to buy right and then renovate to get what you want.

This is especially relevant in well-located areas that will give homeowners the benefit of a shorter commute. These will be the homes that will be in demand in the long-term as it gets harder and harder to travel in from the periphery by car.