Ontario is often thought to be the most expensive province for real estate – a perception created from the fact that it’s home to the Toronto housing market, one of the hottest in the nation.
Interestingly enough, according to recent data compiled by Zoocasa, Toronto doesn’t hold the top spot for Ontario’s most unaffordable housing market. That would actually be Richmond Hill, a residential Greater Toronto Area suburb where locals earning the median household income of $88,535—$47,962 short of the income required—would have some difficulty purchasing a home at the average price of $999,311. Comparably, a Torontonian earning the median household income of $ 65,829 would find themselves $41,282 short of the income required to purchase a home in 416.
Toronto came in as slightly more affordable due to its more diverse makeup of housing types; compared to neighbouring suburbs where the majority of sales are in the detached home segment, Toronto condos made up 56% of the total transactions that occurred in August. In contrast, 52% of the homes sold in Richmond hill over the same time frame were houses.
As detached homes are generally the most expensive home type available on the market, that can skew average home prices higher in a suburban market, rather than sales activity for condos in downtown Toronto.
Determining an Affordable Market
A region’s home affordability is determined by more than just the average home price – it also requires that homebuyers’ income be aligned with the market so residents can afford to purchase local properties.
This often isn’t the case in many regions throughout Ontario. For example, A home buyer in Guelph will have greater purchasing power in relation to their household income compared to a homebuyer in Markham where they would have a $30,354 gap in their budget.
Ontario’s Most Affordable Markets
Zoocasa calculated the required income to purchase the average home in 28 major markets across the province to determine the markets which are most aligned with their respective incomes. Assuming that a 20% down payment is made, and the buyer qualifies for a mortgage rate of 3.14% at a 30-year amortization, the resulting amount was then compared to the actual median household income in each region, to determine whether local home buyers face an income gap or surplus when attempting to enter the market.
Check out the infographic below to see which Ontario housing markets are most affordable for local home buyers.