Calgary 
Only Regina, Calgary, Edmonton, Saskatoon, and Winnipeg meet the criteria of the right income, right home price and high market share of starter homes, says Point2Homes.com, a realty firm.
The concept of “starter homes,” once considered affordable entry-level properties, is undergoing a radical redefinition in Canada. These homes are no longer exclusively small, modest dwellings around the $200,000 mark but are becoming whatever the market decides is the first stepping stone for first-time buyers, regardless of size or price.
A new study by Point2Homes.com analyzed the ability of renters to transition to homeownership in Canada’s 50 most populous cities, using half the city’s benchmark price as the value for starter homes. The study assessed starter home affordability by considering renter household incomes alongside mortgage affordability, assuming a 20% down payment, and a 5.75%, 25-year fixed-rate mortgage not exceeding 30% of income, property taxes, and insurance costs.
Renters in 36 of the 50 largest cities in Canada find homeownership elusive, earning up to 60% less than what’s required. Ontario and British Columbia, including cities like Toronto and Vancouver, are particularly inaccessible, with renters earning 42% to 59% less than what’s needed for a starter home. Furthermore, starter homes make up less than 10% of the inventory in 37 cities, further fueling the inaccessibility.
However, not all cities present a grim picture. In 14 cities — Edmonton, St. John’s, Regina, Saguenay, Trois-Rivières, Quebec City, Lévis, Winnipeg, Saskatoon, Gatineau, Calgary, Sherbrooke, Terrebonne, and Laval renters earn 100% or more of the income needed to afford an entry-level home.
Drilling down on specifics, in the 14 least affordable cities, starter home prices were generally higher than $500,000, with three cities even crossing the $700,000 threshold. Ontario cities were predominantly featured in the list of places where renters were unable to afford a starter home.
The rising costs of starter homes have created a precarious situation for renters and first-time buyers, requiring meticulous evaluation of home prices, incomes, and mortgage rates to determine the viability of homeownership. Renters in several cities, including Richmond Hill, Oakville, Markham, and Vaughan, were found to be significantly short of income requirements for purchasing a starter home in their city.
There are anomalies, though. In Windsor and Calgary, despite similar starter home prices, the renter household income significantly affects accessibility. While Calgary renters earn 5% more than required, Windsor renters earn 48% less than necessary as a renter household income in Windsor is $40,241, while in Calgary, it’s close to $69,000.
However, the availability of starter homes is still a significant factor. Only 13 of the 50 largest cities have starter home shares higher than 10%. Of these, only five – Regina, Calgary, Edmonton, Saskatoon, and Winnipeg – meet the criteria of right income, right home price, and high market share of starter homes.
Despite these positive outliers, the overall picture is worrying.
A glaring shortage of starter homes, with 11 cities — Ajax, Cambridge, Barrie, St. Catharines, Kingston, Guelph, Laval, Sherbrooke, Milton, Longueuil, and Sanguenay — having virtually no inventory, further complicates the issue.
Housing Affordability – Starter Homes in the 50 Largest Canadian Cities
| City | Starter Home Price | Renter Household Income | Minimum Income Required | Household Income Vs Needed Income | |
| 1 | Richmond Hill,ON | $740,300 | $70,422 | $169,749 | -59% |
| 2 | Oakville,ON | $721,850 | $70,422 | $167,106 | -58% |
| 3 | Markham,ON | $705,350 | $70,422 | $161,329 | -56% |
| 4 | Vaughan,ON | $689,550 | $70,422 | $158,677 | -56% |
| 5 | Burlington,ON | $538,900 | $59,726 | $127,057 | -53% |
| 6 | Whitby,ON | $542,500 | $67,880 | $134,123 | -49% |
| 7 | Brampton,ON | $537,950 | $70,422 | $130,051 | -46% |
| 8 | Toronto,ON | $564,400 | $70,422 | $129,678 | -46% |
| 9 | Milton,ON | $554,050 | $70,422 | $128,696 | -45% |
| 10 | Ajax,ON | $520,850 | $70,422 | $128,404 | -45% |
| 11 | Mississauga,ON | $536,950 | $70,422 | $127,118 | -45% |
| 12 | Richmond,BC | $589,600 | $73,791 | $127,612 | -42% |
| 13 | Vancouver,BC | $585,350 | $73,791 | $126,168 | -42% |
| 14 | Coquitlam,BC | $538,950 | $73,791 | $117,435 | -37% |
| 15 | Burnaby,BC | $536,334 | $73,791 | $116,129 | -36% |
| 16 | Oshawa,ON | $429,800 | $67,880 | $109,683 | -38% |
| 17 | Windsor,ON | $278,350 | $40,241 | $77,404 | -48% |
| 18 | Surrey,BC | $507,161 | $73,791 | $109,912 | -33% |
| 19 | Hamilton,ON | $375,961 | $59,726 | $95,455 | -37% |
| 20 | Langley,BC | $498,350 | $73,791 | $108,544 | -32% |
| 21 | Guelph,ON | $388,300 | $63,750 | $97,658 | -35% |
| 22 | Barrie,ON | $373,000 | $63,750 | $94,858 | -33% |
| 23 | Cambridge,ON | $373,150 | $67,562 | $94,618 | -29% |
| 24 | Saanich,BC | $425,700 | $68,628 | $94,905 | -28% |
| 25 | Waterloo,ON | $374,100 | $67,562 | $93,592 | -28% |
| 26 | Kitchener,ON | $371,400 | $67,562 | $93,062 | -27% |
| 27 | St. Catharines,ON | $300,200 | $53,478 | $78,765 | -32% |
| 28 | London,ON | $310,000 | $56,443 | $81,268 | -31% |
| 29 | Kelowna,BC | $405,960 | $69,703 | $90,660 | -23% |
| 30 | Ottawa,ON | $311,150 | $60,785 | $78,681 | -23% |
| 31 | Abbotsford,BC | $389,350 | $70,886 | $86,460 | -18% |
| 32 | Kingston,ON | $262,550 | $58,985 | $69,268 | -15% |
| 33 | Greater Sudbury,ON | $231,000 | $54,961 | $62,913 | -13% |
| 34 | Montreal,QC | $279,820 | $59,342 | $67,288 | -12% |
| 35 | Halifax,NS | $248,450 | $56,631 | $62,180 | -9% |
| 36 | Longueuil,QC | $239,231 | $59,342 | $59,441 | 0% |
| 37 | Laval,QC | $240,010 | $59,342 | $58,367 | 2% |
| 38 | Sherbrooke,QC | $169,545 | $45,631 | $43,528 | 5% |
| 39 | Terrebonne,QC | $229,971 | $59,342 | $56,746 | 5% |
| 40 | Calgary,AB | $275,400 | $68,795 | $65,339 | 5% |
| 41 | Gatineau,QC | $217,935 | $58,914 | $54,205 | 9% |
| 42 | Saskatoon,SK | $187,800 | $56,156 | $47,746 | 18% |
| 43 | Winnipeg,MB | $168,150 | $54,007 | $43,989 | 23% |
| 44 | Trois-Rivières,QC | $133,459 | $45,953 | $35,775 | 28% |
| 45 | Lévis,QC | $164,750 | $52,273 | $41,386 | 26% |
| 46 | Quebec City,QC | $159,629 | $52,273 | $40,763 | 28% |
| 47 | Saguenay,QC | $125,680 | $45,739 | $33,702 | 36% |
| 48 | Regina,SK | $155,600 | $57,304 | $40,894 | 40% |
| 49 | St. John’s,NL | $153,800 | $56,590 | $37,817 | 50% |
| 50 | Edmonton,AB | $185,500 | $70,573 | $46,483 | 52% |
The data also revealed that while the definition of a starter home has become “the cheapest home in town,” this new definition does not make it any easier for renters and first-time buyers.
Even homes traditionally representing the epitome of affordability are becoming increasingly unreachable, further blurring the lines of what a ‘starter home’ really is in today’s complex housing market.
This article is a real eye-opener! As a prospective homeowner in Canada, I’ve always been concerned about the affordability of buying a starter home in the current market. “14 of the 50 Largest Cities in Canada Where Renters Can Afford to Buy a Starter Home” provides valuable insights into some lesser-known cities where the dream of homeownership can become a reality. It’s reassuring to know that there are more options available beyond the major urban centers. I’m definitely going to explore these cities further to see which one aligns with my budget and lifestyle. Thanks for compiling this list and shedding light on the possibility of turning renters into proud homeowners!