If your lifelong dream is to become a homeowner, you might want to consider moving away from Toronto or Vancouver.
The two Canadian cities are notoriously unaffordable, but now a new study has crunched the numbers to give prospective buyers a better perspective on the market.
After analyzing data from Statistics Canada and the Canadian Real Estate Association, real estate site Zoocasa found that only those in Toronto’s top 10 per cent income bracket can afford a detached home in the city.
Specifically, Torontonians need to make an average income of $124,554 in order to afford a home at the benchmark price of $873,100. This number was calculated based on a 20 per cent down payment, a 3.75 per cent mortgage rate, and 30-year amortization.
If you think those numbers are bad, just take a look at Vancouver. Only the top 2.5 per cent earners in the West Coast city can afford a single-family home at the benchmark price of $1.441 million. That means a Vancouverite needs an income of $205,475 in order to buy a home.
When it comes to condos, the outlook isn’t much better in Canada’s biggest cities. Vancouver, Toronto, and Victoria top the list of most expensive markets, requiring Canadians to be in the top 25 per cent of earners to afford an apartment.
Hamilton and Kitchener-Waterloo round out the top five. In those cities, at least 50 per cent of top earners can afford a condo with benchmark prices of $402,400 and $320,857, respectively.
“This illustrates just how elite a level of income you need to purchase a benchmark home in these cities,” said Penelope Graham, Zoocasa’s managing editor. “It really highlights that house prices have not kept pace with incomes in these cities.”
So which Canadian city is the most affordable for prospective home buyers? That would be Regina.
Seventy-five per cent of top earners here can afford a detached home or a condo with a benchmark price of $275,900 and $160,200, respectively. That means the minimum income of prospective homeowners in Regina only needs to be between $22,844 and $39,342 in order to afford a home.
Saskatoon and Winnipeg are similarly affordable, with 75 per cent of top earners able to afford a condo and 50 per cent of top earners able to afford a detached home.