These Are the Most Affordable Housing Markets in Ontario

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:

ontario-home-affordability-income-gap-zoocasa

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

About Penelope Graham

Penelope Graham is the Managing Editor at Zoocasa. A born-and-bred Torontonian and quintessential millennial, she has over a decade of experience covering real estate, lifestyle and personal finance topics. When not keeping an eye on Toronto's hot housing market, she can be found brunching in one of the city's many vibrant neighbourhoods. Find her on Twitter at @pjeg14.