What You’d Need to Save to Buy a Home in Barrie on a Median Income

Located to the north of the Greater Toronto Area and dubbed the “Gateway to Cottage Country”, the City of Barrie has long been a popular locale for retirees and those seeking a quieter pace of life with smalltown feel.

However, it has become increasingly popular with younger home buyers in recent years, who are drawn to its idyllic, lakeside lifestyle – not to mention its comparably lower real estate prices. According to the Barrie and District Association of Realtors (BDAR), demand for Barrie homes for sale was up a robust 11.3% this autumn with 237 transactions at an average price of $490,854. That’s nearly half of the $843,637 a buyer could expect to shell out for the average GTA home.

Lots of Opportunity for First-Time Home Buyers

This has made the city an especially attractive draw for those trying to break into the housing market, particularly in neighbourhoods located along its southern border; according to Derek Clugston, a local Zoocasa real estate agent, first-time buyers will find plenty of opportunities in South Barrie neighbourhoods like Painswick and Holly. 

Clugston says proximity to the Barrie GO Train station makes Painswick attractive to young professionals working in Toronto, noting that the commute is just about an hour one-way. Detached, single-family homes with parking can be found in the $400,000-$500,000 range, with more affordable townhomes ($320,000 – $350,000) and condos ($300,000 – $325,000) also available in the neighbourhood. 

Young families may prefer Holly, where prices are similar but there are more highly rated schools and closer access to recreation centres. This is in addition to local grocery stores, movie theatres, and retail found in both neighbourhoods. Buyers in Holly and Painswick will also enjoy easy access to Highway 400. Clugston also highlights that there is strong demand for rental properties in Barrie and suggests first-time buyers consider neighbourhoods in the north end of the city for investment opportunities. For example, qualified buyers could find duplexes ranging between $550,000 – $600,000 and the income earned from renting out one of the units could help them offset monthly costs while they build equity.

What Could A Home Buyer Afford on a Median Income?

As well, recent numbers from Zoocasa find that Barrie real estate prices are considerably better aligned with middle-class incomes in comparison to other major Ontario urban centres. The study calculated the maximum mortgage affordability for the 11 neighbourhoods located across the city, based on the year-to-date (January to November, 2019) median-priced home in each, as well as the city’s median income of $77,904. 

That mortgage amount was then compared to median home prices in each city to reveal the gap the home buyer would need to cover via a down payment. The study also crunched the number of years it would take a household to save for that down payment, assuming they set aside 20% of their income on an annual basis. 

To determine the mortgage amount, it was assumed the borrower would qualify for a 3% interest rate and 25-year amortization. One per cent of the home’s cost for property taxes, and a $100-heating bill, were also factored in. (Condo fees, loans, and other debt obligations were not factored into the calculation.)

Three Neighbourhoods Stand Out for Afforability

The study finds that in a total of three neighbourhoods – City Centre, Lakeshore, and Ardagh, where median home prices remain below $450,000 – a median-income household would qualify for a large enough mortgage to purchase a home, and save for the required down payment within a six-year timeline. An additional four – Sunnidale, Holly, East, and Allandale – would require buyers to save between 7.1 – 7.7 years, as median home prices sit in the $460,000 – $465,000 range.

However, a median income would still fall well below what’s required to buy a home in the city’s priciest neighbourhoods; in Innishore, where the median home price is $602,500, such a borrower would find themselves $267,770 short for a home purchase, requiring they save for 17.8 years to acquire the necessary down payment funds.

Top 3 Most Affordable Neighbourhoods in Barrie

• 1 – City Centre
• Median home price: $420,000
• Maximum mortgage amount: $351,388
• Down payment required: $78,183
• Years to save: 5

• 2 – Lakeshore
• Median home price: $435,000
• Maximum mortgage amount: $347,604
• Down payment required: $87,396
• Years to save: 5.6

• 3 – Ardagh
• Median home price: $435,000
• Maximum mortgage amount: $347,604
• Down payment required: $87,396
• Years to save: 5.6

Top 3 Least Affordable Neighbourhoods in Barrie

• 1 – Innishore
• Median home price: $602,500
• Maximum mortgage amount: $325,730
• Down payment required: $276,770
• Years to save: 17.8

• 2 – West
• Median home price: $490,000
• Maximum mortgage amount: $341,535
• Down payment required: $148,465
• Years to save: 9.5

• 3– Painswick
• Median home price: $485,000
• Maximum mortgage amount: $342,241
• Down payment required: $142,759
• Years to save: 9.2

Methodology

Median home prices were sourced from the Barrie & District Association of REALTORS for the period of January to November 2019. Data was retrieved on Dec 4, 2019. The median total household income for the City of Barrie was sourced from Statistics Canada.

The maximum mortgage affordability is based on buying the median-priced home on the median income, the mortgage “stress test” rate of 5.19%, a 25-year amortization, and carrying costs of 1% in property taxes and $100/month for heating. Calculations were made using the Ratehub mortgage calculator: https://www.ratehub.ca/mortgage-affordability-calculator.

The minimum down payment required is the difference between the home price and the maximum mortgage available if the down payment was 20% or more of the home price. If the minimum down payment is under 20%, the max mortgage amount includes the mortgage insurance premium.

About Zoocasa

Zoocasa is a full-service brokerage that offers advanced online search tools to empower Canadians with the data and expertise they need to make more successful real estate decisions. View real estate listings at zoocasa.com or download our free iOS app.