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Canadian Real Estate Market: The Income Required For A Home In Canada’s 10 Largest Cities

Buying a house is a dream of almost everyone. People spend their lifelong savings for building their first home, but with changing times and rising inflation rates, real estate markets across the globe including the Canadian real estate market are not spared from higher prices. 

There are numerous things that come with buying a house like taking care of the mortgage, insurance, closing costs, loans, etc. The larger the city, the costlier it is to buy a house. It also increases your cost of living. Thus, it is crucial to think thoroughly before making a decision to buy a house in these 10 largest cities of Canada as per Canadian real estate stats. 

The Income Needed to Buy a Home in Canada

The below Canadian real estate data was taken from Better Dwelling which shows the minimum income required to buy a house in the top 10 Canadian cities. The stats have used the benchmark price of the National Bank of Canada (NBC), the Canadian government’s median household income, and the income needed for a mortgage. Though matters like ownership charges and down payment have not been included. 

Income You Need to Buy A Home in Canada’s 10 Largest Cities

A House in Vancouver

Buying a home, a non-condo one is possible only for the top 20 percent of the households here as well. One requires to have a household income of $230,488 which is a whopping 222.8 percent of the average income. While for a condo house it is $127,633. This makes Vancouver a city highly populated with wealthy individuals. 

A House in Victoria

If you want to buy a house in Victoria, it is the second most expensive area that you are aiming for. To buy a non-condo, the average household income needed is $181,275, while for a condo resident it is $102,556. Here, condo houses are cheaper compared to Vancouver and Toronto, though for a middle-class household, it is still very expensive. 

A House in Toronto

Buying a house in Toronto is possible only by the top 20 percent of households, excluding buying a condo. The annual household revenue needed to buy a non-condo resident is around $178,499, which is 132.7 percent of the average income. While, if you are looking for a condo resident, it is around 62 percent of the average income amounting to $124,335 annually. This eventually makes it impossible for a middle-class family to buy a home in Toronto. 

Read: Understanding Canada’s First Time Home Buyer Incentive

Years it Takes to Save for a Down Payment

Down payment is the largest sum you have to save for buying a house in Canadian real estate. The average number of months it takes for saving for a minimum amount of down payment is 60. 

As compiled by NBC, in 1989, the average number of months was 57. In 1992, it was at a surprising level of 26 months. For some cities, the down payment saving is faster than the others. 

Below is the chart is taken from Better Dwelling stressing how many years of saving is essential to secure a down payment. They have compiled the data from NBC. The median for every region is utilized while the assumption of the saving is 10 percent of the average income. 

Income You Need to Buy A Home in Canada’s 10 Largest Cities

Down Payment in Toronto

If you want to buy a home in Toronto, the savings for a down payment takes a long 24 years or 289 months, for a non-condo resident. While for a condo house, it takes 4.25 years. The income of individuals in this city has hiked by 1.3 percent in the last year, but the rates also increased by 5.5 percent and 1.2 percent for non-condo and condo houses respectively. 

Down Payment in Vancouver

For an individual it would take more than 3 decades – 34 years to secure a down payment. It is at 409 months for non-condo houses, while for condo houses it is a little more than 58 months. This is data for a typical income earner. In this city, the average income has increased by 1 percent in the last year, while the house price increase stands at 0.1 percent and 0.4 percent for non-condo and condo houses respectively. 

Montreal is Affordable

Montreal is one of the largest cities in Canada that falls in the category of affordable. The average household income for a non-condo apartment is $91,083. And for a condo apartment, it is $67,750 which is just 8.7 percent higher than the median household income. 

While the down payment for a non-condo house would take around 39 months which is like a little more than 3 years. The month required for a condo house stands at 29. The down payment for Montreal is reasonable compared to other big Canadian real estate areas. 

Read: First Time Home Buyer Programs in Canada

What Should You Keep in Mind for Buying a Home in Canada?

When you buy your first home, there are certain things you should keep in mind as listed below. 

1. Make Sure that You are Ready to Buy a House

Being ready to buy a house is not just related to finance, but it involves emotions as well. Make sure that this is the right type of decision for you and your family at whatever life stage you. Just consider your future needs. 

2. Gain Financial Stability

Gaining financial stability means that you will be able to pay the mortgages on time and still would be able to lead a comfortable lifestyle. Also, it would work better for you if you pay your debt fully or partially before investing in a house.

3. Save for a Down Payment

As stressed in this article, a down payment is the largest sum you will need to pay. It would require years of saving depending on the city you chose to live in. Thus, plan early and start saving money

4. Look Out for the Best Locality as per Your Affordability

Instead of buying an expensive house in some pose locality, try to find a house which you can actually afford. The costlier the house, the larger the sum of mortgage payment would be and that can create an issue if you can’t afford it in the future. 

5. Consider Your Preferences

This includes considering where you are buying your house, what utility is accessible near it, how far you will have to commute for your work, schools in the area, etc. Choose a home that is at the center or near the center to give you access to almost everything. 

Rising of Canadian Real Estate Market

Income You Need to Buy A Home in Canada’s 10 Largest Cities

As you can see in the graph by the Canadian Real Estate Association (CREA) above, the sales of houses recorded in March this year are significantly high. The actual sales (seasonally not adjusted) rose by 76.2 percent on a year-on-year basis despite the pandemic. 

As per CREA’s Chair Cliff Stevenson, “The real issue is not strength in housing markets but imbalance. That demand has been around for months, but with the shortages in supply we have across so much of Canada, a lot of that demand has been pressuring prices”. 

Raising prices is not in hand. That’s the value of the real estate sector as we get more for our houses when we sell than what we paid to buy them. That’s why there is a quote, “Don’t wait to buy real estate, buy real estate and wait”. House planning is necessary if you have a dream to buy one, be cautious and strategize well, that’s all it takes. 


Devanshee Dave

Devanshee is a staff writer at YourFirst.ca. She is a finance enthusiast and has completed her Master’s degree in Mass Communication & Journalism. She is currently pursuing CFA (Chartered Financial Analyst) and has worked as a journalist in a local business newspaper, multiple start-ups as well as finance and economy-related online media houses.

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