Home prices have crept up throughout 2023. According to the Canadian Real Estate Association, the average national price reached $760,600, up 7.8% over the last six months. In that time, while interest rates have risen, buyer demand is still at a high, and with such low levels of national inventory, it’s possible that prices will continue to climb for the rest of the year.
Despite this, there are still pockets of affordability across Canada. We analyzed major cities from coast to coast to learn where a homebuyer earning the median income in their city could afford a home at the city’s average price, using the most recently available data.
10 of 17 Cities Have Home Prices Out of Reach of Median Income Earners
While Ottawa is the city with the greatest median income of $106,240, and can therefore afford the highest-priced home, a home in the city at the current average price may still be out of reach. The average home price in Ottawa is $652,700, just over $160,000 higher than the highest-priced home median income earners can afford there. Of the 16 cities we analyzed, median-income earners would struggle to afford average-priced homes in 10 of those.
- Read: Analyzing the Impact: Can House Prices Decline if Canada’s Population is Growing at Record Rates?
The city with the highest median income that can afford a home at the average price is Edmonton, where the median income is $93,710, meaning buyers can afford as much as $433,173, just under $70,000 more than the average price of a home.
Enjoying our content? Subscribe to our free weekly newsletter to get real estate market insights, news, and reports straight to your inbox.
It is likely no surprise to most Canadians that those earning the median income in Vancouver and Toronto will find it difficult to afford a home at the average price in either of these major markets. In each, homes cost an average of over $1,000,000. In Vancouver, a median income earner may be able to afford $413,869, around $800,000 less than the average price. Toronto homebuyers earning a median income are limited in their options, if any, at $395,785.
- Read: Renting Vs. Buying: Where Monthly Mortgage Payments are Comparable to Monthly Rents Across Canada
Where Will Buyers Find the Greatest Affordability?
Those earning a median income in smaller cities, however, are in luck. While the median income in these cities is smaller than major ones in British Columbia or Ontario, home prices are vastly more affordable and there is a much lower threshold to hit. For instance, while Saint John has the lowest median income on our list of $79,000, the average price in the province is just $291,000, far lower than the maximum that median income earners could potentially afford of $365,165.
Other cities, such as Winnipeg, Saskatoon, Regina, Quebec, Prince Edward Island and Edmonton all have home prices lower than the most that median income earners could afford. Buyers in Edmonton may be able to afford to buy a home up to a maximum of $429,456, while those in Regina have the largest gap between what the median income could afford and the average price, at just under $111,000.
If you’re looking to enter one of these markets, it’s important to speak with a local realtor who can give you specific information and guidance about the local real estate market. Give us a call today to discuss your home-buying plans.
