Ontario, Canada’s largest province by population, is often thought to have its priciest real estate, too – a common perception, considering the province is home to the Toronto housing market, a city reportedly so hot that it boasts price growth challenging that of Vancouver.
However, according to recent data compiled by Zoocasa, Toronto doesn’t take top spot for Ontario’s most unaffordable housing market. That honour goes to the residential suburb of Richmond Hill, where locals earning the median household income of $88,535 would find themselves a whopping $47,962 short to purchase a home at the average price of $999,311.
In comparison, a Torontonian earning the city’s median household income of $65,829 would find themselves $41,282 short of the average home price of $785,223.
Much of Toronto’s second-place unaffordability is due to its more diverse mix of housing; condo sales made up 56 per cent of the transactions that occurred in August, in contrast to detached home sales taking the lion’s share in Richmond Hill, at 52 per cent. A greater proportion of more expensive home types sold skews the average home price – and affordability gap – higher, to nearly the million-mark at $999,311.
What Determines an Affordable Market?
However, a region’s home affordability is dependent on more than just the average home price – incomes must also be aligned in order for residents to afford to purchase, and carry, local properties.
Despite being home to one of Canada’s hottest housing markets, whether or not this is the case throughout Ontario varies widely across the province. For example, a prospective home buyer perusing Ottawa real estate or London, Ontario real estate would enjoy greater purchasing power in relation to their household income, compared to a household in Mississauga who would incur a $10,000-gap in their budget. Meanwhile, those making the move to Hamilton in search of relative affordability will find it, as the local median income of $67,298 remains perfectly in line with the average home price of $501,073.
Which Ontario Markets Are Most Affordable?
To determine which markets are most aligned with incomes, Zoocasa calculated the required income to purchase the average home in 28 major markets across the province, assuming a 20-per-cent down payment is made at a mortgage rate of 3.14% and a 30-year amortization. This amount was then compared to the actual median household income in each region, to determine whether local home buyers face an income gap or surplus when attempting to enter the market.
Check out the infographic below to see which Ontario housing markets are most affordable for local home buyers:
5 Most Affordable Housing Markets in Ontario
1 – Thunder Bay
Average Home Price: $227,750
Required Income: $31,067
Median Income: $66,163
Surplus: $35,096
2 – Sudbury
Average Home Price: $272,523
Required Income: $37,174
Median Income: $68,736
Surplus: $26,901
3 – Ottawa
Average Home Price: $433,684
Required Income: $59,158
Median Income: $85,981
Surplus: $26,823
4 – Whitby
Average Home Price: $632,395
Required Income: $86,264
Median Income: $103,809
Surplus: $17,545
5 – Waterloo
Average Home Price: $493,358
Required Income: $67,298
Median Income: $83,045
Surplus: $15,747
5 Least Affordable Ontario Housing Markets
1 – Richmond Hill
Average Home Price: $999,311
Required Income: $136,315
Median Income: $88,353
Income Gap: $47,962
2 – Toronto
Average Home Price: $785,223
Required Income: $107,111
Median Income: $65,829
Income Gap: $41,282
3 – Vaughan
Average Home Price: $997,587
Required Income: $136,079
Median Income: $105,351
Income Gap: $30,728
4 – Markham
Average Home Price: $875,182
Required Income: $119,382
Median Income: $89,028
Income Gap: $30,354
5 – Oakville
Average Home Price: $1,030,482
Required Income: $140,567
Median Income: $113,666
Income Gap: $26,901
