Purchasing a home in Canadian real estate markets can be challenging. The national benchmark price is still 3.7% higher than it was last year, at $766,600. Gone are the record highs from early 2022, but in many Canadian cities, year-over-year prices are still up from 2021. As interest rates and the cost of borrowing continue to climb, some Canadians are finding it more difficult to secure a mortgage.
So, what kind of household income would you need to afford a home in Canada right now? We’ve got the answers! We compared average home prices in 20 different cities across Canada and the median income in those cities to the income required to buy. Here’s what we learned.
12 of the 20 Markets Could be Considered Affordable
Of the 20 markets we analyzed, buyers with a median household income could afford to buy in a little over half of them. Ontario is unfortunately one of the least affordable provinces to buy in, but Ottawa, Thunder Bay, and Windsor/Essex are the more affordable cities. In these cities, the median income is higher than the income required for the average home by over $16,000, $47,700 and $7,000 respectively. Toronto would require an income of $176,738 to afford the average home costing $1,086,762. That is 82.8% more than the median income of $96,700. British Columbia follows suit for affordability, and the major markets are likely tough to break into for the average Canadian. Vancouver homes currently cost an average of $1,232,213 and would require the average household to earn $200,400. That is more than double the median income of $98,640.
Markets in the Prairies are the Most Affordable
The Prairies make up half of the affordable areas in the country. In each of these markets, the average home could likely be purchased with the median income. In Regina, the average home costs $305,550 and requires an income of $49,650 to afford. The median income is well above that, exceeding $100,000. This is the most affordable city on the list. It’s followed by Edmonton and Saskatoon, with median incomes around $45,000 higher than the required income for the average home.
Check out the infographic below to see what kind of household income you need to purchase a home in Canada and which cities are the most affordable:
Methodology: To determine the extent of affordability for median-income households, Zoocasa calculated the maximum mortgage a household with a median income could afford, assuming a 5.14% interest rate, and a 25-year amortization. Other typical household expenditure was not considered.
If you’re planning to buy, sell, or both now is a great time to start talking to a local real estate agent in your market of choice. Our qualified agents across Canada are ready to help you find your dream home. Download our free buyer’s guide and contact us today.
