Here’s How Rich You Have to be to Buy a House in a Big Canadian City
Are you house hunting?
If so, you're in for a bit of challenge (but you already knew that).
While home prices in major GTA cities have stabilized since skyrocketing to unprecedented levels in winter 2017, prospective buyers in Mississauga are still grappling with expensive houses, a challenging mortgage stress test and low inventory.
In Mississauga, the average home price sits at $738,673 (all home types combined).
So, what do you need to make to purchase a home not just in Mississauga, but in any of Canada's major cities?
You'll need to be among the highest echelon of income earners to do so in the most competitive markets, according to new data from real estate website and brokerage Zoocasa.
"The numbers reveal that only those within the top 10 per cent income group can afford to buy houses for sale in Toronto at a benchmark price of $873,100, while Vancouver buyers must be at least within the top 2.5 per cent tier to buy one at the city's benchmark of $1,441,000," says Penelope Graham, managing editor, Zoocasa.
Check out the infographics below to see which income tier buyers must be in to afford houses and apartments across Canada, courtesy of Zoocasa:
For reference, the table below shows the threshold values for each income group. The threshold value is the minimum income needed to be in each income group.
Income groups and the associated thresholds values were sourced from Statistics Canada.
The study, which analyzed how much income prospective buyers would need to afford the benchmark home in their city, calculated the minimum salary required to qualify for a mortgage in 13 census metropolitan areas (CMAs) across Canada, assuming a 20 per cent down payment, 3.75 per cent mortgage rate, and a 30-year amortization.
According to Zoocasa, even apartments are out of reach for the bottom 75 per cent in the largest markets.
While most people know that detached houses are typically unaffordable for lower and middle-income earners, the numbers show even entry-level housing is out of reach for many in those markets. Vancouver and Toronto condo/apartment buyers must still have an income within the top 25 per cent to swing the benchmark unit price of $656,900 and $522,300, respectively.
Fortunately for homebuyers in the prairies, prices are much more reasonable.
Graham says affording a house is feasible for those within the top 75 per cent income group in Regina, as the benchmark property costs $275,900. Saskatoon and Winnipeg are both nearly as affordable, as buyers with incomes in the top 50% can afford houses priced at $301,900 and $326,433, respectively.
Want an apartment in Manitoba or Saskatoon?
Buyers interested in condos will, naturally, enjoy even greater affordability in those cities, with units in all three accessible to the top 75 per cent income group at benchmark prices of $160,200, $170,800, and 227,538.
MLS listings in Edmonton and Calgary are also an option for buyers seeking affordability, with those within the top 50% able to afford a house, and those within the top 75% able to afford an apartment.
So, how does a house in Regina sound now?
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