Would-be buyers in many major cities might not find the median income sufficient to make a purchase
Markets outside major cities like Toronto, Vancouver, and Ottawa hold the greatest concentrations of affordable housing, according to a new poll by Zoocasa.
Over the last six months, the average home price grew by 7.8% to reach $760,600, data from the Canadian Real Estate Association (CREA) indicated.
Coupled with the Bank of Canada’s policy rate settling at a multi-decade high of 5% in July, would-be buyers in major cities might not find the median income sufficient to make a home purchase, Zoocasa said.
The most affordable homes so far can be found in Saint John, New Brunswick, which has a median income of $79,000 versus an average home price of $291,000 as of June.
Zoocasa also pointed at Regina, Saskatchewan as another crucial hub of affordability, with its median income of $92,910 and its average home price of $318,700 as of June.
“While the median income in these cities is smaller than major ones in British Columbia or Ontario, home prices are vastly more affordable and there is a much lower threshold to hit,” Zoocasa said.
Canada's new federal housing minister, Sean Fraser, takes on the challenge of addressing the home affordability crisis and inventory shortage in the housing market.https://t.co/ClGYUFDQ0R#breakingnews #mortgageindustry #housingmarket #affordability #housingcrisis
— Canadian Mortgage Professional Magazine (@CMPmagazine) July 26, 2023
Major markets continue to labour under lack of housing affordability
On the other end of the spectrum, the stark differences between the largest cities’ average home prices ($1.203 million in Vancouver and $1.171 million in Toronto) and their median incomes ($89,530 in Vancouver and $85,620 in Toronto) mean that home purchases are out of reach for most people in these markets, Zoocasa said.
While Ottawa posted the highest median income in Canada at $106,240, a home purchase remains mostly out of reach considering the average home price of $652,700.
“The city with the highest median income that can afford a home at the average price is Edmonton, where the median income is $93,710, meaning buyers can afford as much as $433,173, just under $70,000 more than the average price of a home,” Zoocasa reported.
