The national average home price dropped for the third month in a row in September, down from $750,100 in August to $741,400 in September, providing some relief for homebuyers grappling with high borrowing conditions. According to the Canadian Real Estate Association, local markets are also seeing prices cool off, with Edmonton, the Greater Toronto Area, Montreal CMA, and Greater Vancouver all experiencing a month-over-over price decline in September.
As prices begin to soften from their summer peaks, homebuyers have an opportunity to snag more affordable homes. Though many of the most sought-after markets still have benchmark prices above or nearing $1,000,0000, there are deals to be found in Canada’s most affordable cities, many of which have benchmark prices below $500,000.
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To find out how long it would take for a median-income household to save for the minimum down payment, Zoocasa analyzed single-family home benchmark prices in 15 of the most affordable cities in Canada and calculated the necessary down payment in each. For the purpose of this study, the most affordable cities were determined by analyzing the benchmark prices of cities included in the Canadian Real Estate Association’s September 2023 monthly report. We then analyzed the median total household income in each city, according to Statistics Canada, and calculated how many years it would take to save for the minimum down payment, assuming they are saving 5.1% of their annual income. The household savings rate of 5.1% was sourced from Statistics Canada and was the household savings rate for Q2 2023.
It Takes 5 Years or Less To Save Up for the Minimum Down Payment in the Majority of Cities
Regina is the city where saving for a single-family home down payment may be quickest, requiring 3.6 years of savings. Though Regina may not boast the most affordable single-family home prices, with homes at $326,300 in September 2023, it does enjoy one of the highest median household incomes among the cities we analyzed. At $88,000, the high median household income in Regina provides homebuyers with an edge over other cities that have lower benchmark prices and lower median household incomes.
Fredericton and Sault Ste. Marie have the same median household income of $73,000 and nearly the same benchmark single-family home price, meaning it would take 3.9 years in both cities to save for the minimum down payment of $14,410 in Fredericton and $14,495 in Sault Ste. Marie. Fredericton has the most affordable single-family home price and Sault Ste. Marie has the second-most affordable, so it isn’t surprising that these cities take less than 4 years to save for a down payment.
Other cities that require less than 5 years of saving include Winnipeg, Edmonton, Greater Moncton, St. John’s, Saint John, Saskatoon, and Quebec CMA. Of those cities, Saskatoon requires the highest minimum down payment of $21,610, however, with the second-highest median household income on our list of $89,000, it would take homebuyers 4.8 years to save for a single-family home. Edmonton has the highest median household income of the cities we analyzed, at $96,000, meaning it would take homebuyers just 4.3 years to save up the $21,200 required for the down payment.
Homebuyers need to note that as home prices fluctuate, and typically increase over time, the exact number of years you will need to save for a down payment will likely be longer than the time it takes to buy a home priced at the September 2023 benchmark.
Ontario Cities Require More Time to Save
Besides Sault Ste. Marie, the four other Ontario cities on our list all take more than 5 years to save for the minimum down payment. Of those, North Bay and Sudbury required the least amount of time at 5.1 years and 5.2 years respectively. Those living in Sudbury have a higher median household income than those living in North Bay, however, the benchmark price for a single-family home in North Bay is more than $50,000 cheaper than in Sudbury so homebuyers do not need to save for quite as long.
Halifax-Dartmouth is the second-most expensive city on our list, with homebuyers requiring 6.9 years to save for the minimum down payment of $28,430 – more than $10,000 higher than the most affordable cities. Kingston & Area takes the crown for the most expensive city on our list, with the benchmark price for a single-family home at $565,600 in September 2023. However, the median household income is relatively high at $83,000, so it would take 7.5 years to save for the minimum down payment of $31,560.
As Bancroft & Area largely consists of country land and small towns, it has the lowest median household income on our list at $57,200, and as such it would take the longest amount of time to save for a home here. It would take homebuyers 8.1 years to save up the $23,635 required for a down payment on a benchmark single-family home of $472,700.
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