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With the high price of houses and high mortgage rates, buying a home is a challenge for many in Canada.
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Zoocasa, a full-service brokerage, analyzed 20 cities and found that buyers with a median household income could afford to buy in just over half of them.
Despite a decline in home prices since the peak of early last year, the national average home price was $662,437 in February 2023 according to Canadian Real Estate Association (CREA).
Though Ontario is the most expensive province to buy a home in, Zoocasa says there are still options for those earning around the median income.
In Ottawa, for example, the average home price of $613,000 requires an income of $94,763, which is still below the city’s median income of $121,790. London-St. Thomas is another affordable city in Ontario, where the median income of $94,070 is above the required income of $90,225 to purchase a home at the average price of $583,500.
Meanwhile, Vancouver and Toronto are the most expensive cities, with average home prices of $1,123,400 and $1,091,300, respectively. In these cities, buyers with a median income of $96,700 and $98,640 would need to earn $168,712 and $173,663 to afford a home, respectively.
The most affordable places to buy a home are on the Prairies and the East Coast.
For example, in Regina, where the median income is $106,340, the required income to purchase a home at the average price of $310,200 is $47,963. In Newfoundland and Labrador, the median income of $85,800 can comfortably afford the average home price of $276,700, where an income of only $42,788 is required.
According to the analysis, buying a house in Calgary, Edmonton, Winnipeg, Saskatoon, Montreal, Halifax, and Saint John remains affordable for those who earn above the median household income.
Zoocasa’s calculation does not include typical household expenditure. According to Living Wage Networks, to maintain a modest standard of living, a household (2+2) needed about $81,536 annually in Calgary, $80,371 in Toronto, and $87,652 in Metro Vancouver in 2022. Living Wage calculations consider a conservative estimate for rent from the Canadian Mortgage and Housing Corporation (CMHC), hydro, and tenant insurance in addition to other living expenses.
Credit: Zoocasa
Zoocasa says median total income used in the analysis was sourced from the 2021 census, and the income required to afford the average home price was calculated using Ratehub mortgage affordability calculator, assuming a 20% down payment, mortgage rate of 4.74%, and a 30-year amortization.
