How much house can the average Hamilton resident afford?

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Published October 27, 2022 at 10:56 am

How much house can the average Hamilton resident afford?
With the real estate market in a state of flux and interest rates rising, how much house can the median household and individual in Hamilton afford?

Current and prospective homebuyers in Hamilton face challenges brought on by an unpredictable real estate market and rising interest rates.

According to a recent report by Zoocasa, Ontario residents are especially facing an uphill battle as the province is the least affordable to buy in.

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With the average home in Hamilton selling for $847,946 in September, a minimum annual income of $137,888 would be required.

However, the median household income, according to the latest census data, is $103,820. The maximum mortgage that the median household could afford is $601,028, according to Zoocasa.

Meanwhile, the median individual income in Hamilton is $40,400 — a virtual non-starter.

To determine the extent of affordability for median-income households, Zoocasa calculated the maximum mortgage a household with a median income could afford, assuming a 5.14 per cent interest rate and a 25-year amortization.

Of the 20 markets analyzed, buyers with a median household income could afford to buy in a little over half of them.

Ottawa, Thunder Bay, and Windsor/Essex are the more affordable cities in Ontario, with the median income being higher than the income required for the average home by over $16,000, $47,700 and $7,000, respectively.

Toronto would require an income of $176,738 to afford the average home costing $1,086,762 — 82.8 per cent more than the median income of $96,700.

British Columbia follows suit for affordability, and the major markets are likely tough to break into for the average Canadian. Vancouver homes currently cost an average of $123,213 and would require the average household to earn $200,400, more than double the median income of $98,640.

“Gone are the record highs from early 2022, but in many Canadian cities, year-over-year prices are still up from 2021,” reads the Zoocasa report. “As interest rates and the cost of borrowing continue to climb, some Canadians are finding it more difficult to secure a mortgage.”

The Prairies make up half of the affordable areas in the country. In each of these markets, the average home could likely be purchased with the median income. In Regina, the average home costs $305,550 and requires an income of $49,650 to afford. The median income is well above that, exceeding $100,000, making it the most affordable city on the list, followed by Edmonton and Saskatoon, with median incomes around $45,000 higher than the required income for the average home.

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