We always knew Toronto had one of the most expensive housing markets in Canada, but turns out, it’s also one of the least affordable cities to own a home in North America.
Toronto came in at No. 11 on Zoocasa’s housing affordability ranking of 35 North American cities. The markets were listed from least to most affordable.
To make their calculations, the real estate listing site compared the median income needed to purchase a home to the actual median income earned in each city. The greater the difference between these numbers, the more unaffordable they were.
With a median home price of $646,732, a Torontonian would need an income of $92,220 in order to secure a 20 per cent down payment and qualify for a 30-year mortgage at a fixed rate of 3.75 per cent.
Problem is, the actual household median income in Toronto is $66,520, which leaves an income gap of roughly $25,700. Compared to the U.S., this puts the city on par with Miami, which has a gap of $27,800 and ranked at No. 10 on Zoocasa’s list.
It’s well-known that Toronto has an affordability crisis, and a new report from RBC Economics Research only confirms this.
“In Toronto, owning a home remains a huge stretch for many buyers,” RBC’s housing trends report noted. “Despite a significant cooling to the Toronto housing market, RBC’s aggregate measure (66.1 per cent) continues to be near historical highs.”
Toronto doesn’t hold the title of least affordable Canadian city on Zoocasa’s ranking, though. That belongs to Vancouver.
The West Coast city sits at No. 2 on Zoocasa’s report of least affordable housing, with a staggeringly high income gap of more than $100,000. Vancouverites would need an income of $166,578 (rather than their actual income of $66,014) in order to afford the average house price of $1.1 million.
Only San Francisco was able to beat Vancouver’s high real estate market. There, the median house price is $1.8 million, and the average income is $129,379.
The good news is that 18 of the 35 cities included in the study are considered affordable, and three of those cities are Canadian. Montreal, Ottawa, and Calgary came in at number 20, 30, and 35, respectively.
Overall, Calgary had the most affordable housing out of all 35 North American cities thanks to its income surplus of more than $40,000. Oklahoma City was the second most affordable with a surplus of more than $35,000.
Montreal and Ottawa both had surpluses as well that equalled more than $5,500 and $21,000, respectively.
For the full ranking and results, visit Zoocasa or check out the infographic below.