Buying a Home on One Income

Ontario Cities Mostly Out of Budget for Single Income Buyers

By: Zoocasa

With the rise of real estate prices across Ontario, buying a home in the province, even with dual incomes, is no easy feat. For the significant portion of Canadians who are buying a home on a single income, you can expect that affordable cities are even fewer and far between.

Results from a Zoocasa study, which looks at the affordability of single home buyers in 20 cities across Canada, reveals that four of the five Ontario cities are out of budget for all age groups. Save for the capital, where a couple of age groups can afford homes on a single income, Ontario cities remain mostly unaffordable for singles looking to buy a home.

The report collected data on a basis of average and benchmark home prices sourced from regional real estate boards. The minimum income required to qualify for a mortgage on the average home was calculated on an assumption of a 20% down payment and financing taken out on a 3.29% interest rate amortized over 30 years. Results are compared to the median income data collected by Statistics Canada on “persons living alone who earned employment income”.

See the infographics below for more information on single income home affordability of all 20 cities.

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Prairie and Maritime Provinces Most Affordable

Single buyers looking to purchase a home will have more luck in the Prairie and Maritime provinces.

Regina takes the top spot for affordability out of all 20 cities, where the median single income is $58,828, and the average home is worth $284,424, leaving buyers with an income surplus of $20,025. Out of the top 10 affordable cities, six are from the Prairie provinces while the remaining four cities are located in the Maritime provinces. Singles in Saint John have a median income of $42,888, and an average home price of $181,576, meaning buyers will have an average surplus of $18,038 in income.

Other affordable cities include Edmonton, Saskatoon, Halifax and Calgary.

Greater Golden Horseshoe Remain Unaffordable for Singles

As foreseen, Toronto places second in unaffordability for buyers on a single income, coming in just after Vancouver, which takes the top spot. Results show that single Torontonians have a median income of $55,221 and are left to fork up an additional $46,858 on the average home price of $748,328.

In Hamilton-Burlington, homes remain mostly unaffordable with a median single income of $51,253, leaving buyers short of $23,778 on the average home price of $550,058. Guelph real estate lands sixth in unaffordability where the average home is listed as $522,300 and single home buyers have a median income of $51,850, resulting in an income gap of $19,397. Single home buyers in Kitchener-Waterloo have a median income of $51,118 and may want to relocate to central Ontario, near Barrie real estate, where they can avoid paying an additional $14,914 on the average home price of $484,076.

The remaining two Ontario cities of the six unaffordable cities for single income buyers include London and Ottawa.

Gen Xers Have the Most Purchasing Power

Results of the study also revealed which age group was more likely to be able to afford a home on a single income. In every market, Gen Xers (age groups 35 – 44 and 45 – 54) typically had the most purchasing power and earnings, with an overall 11 cities within their budget. This was followed by Boomers (aged 55 – 64) and lastly, Millennials (aged 25 – 34), who both have 10 affordable cities within budget.

Of the six Ontario cities, all age groups fall out of the range of affordability for single home buyers, save for Gen Xers living in Ottawa. With a median income of $63,509 for those aged 35 to 44, and $62,467 for those aged 45 to 54, home buyers in Ottawa are left with a minimal surplus of $4,467 and $3,425, respectively.

Here are the top five affordable and unaffordable cities for single home buyers:

Top 5 Most Affordable Housing Markets for Single Home Buyers

  1. Regina

Average home price: $284,44

Income required: $38,798

Actual median income: $58,823

Income surplus: $20,025

  1. Saint John

Average home price: $181,576

Income required: 24,769

Actual median income: $42,888

Income surplus: $18,038

  1. Edmonton

Average home price: $338,760

Income required: $46,210

Actual median income: $64,036

Income surplus: $17,826

  1. Saskatoon

Average home price: $290,736

Income required: $39,659

Actual median income: $55,758

Income surplus: $16,099

  1. St. John’s

Average home price: $295,211

Income required: $40,270

Actual median income: $51,964

Income surplus: $11,694

5 Least Affordable Housing Markets for Single Buyers

  1. Vancouver

Average home price: $1,019,600

Income required: $139,082

Actual median income: $50,721

Income gap: $88,361

  1. Toronto

Average home price: $748,328

Income required: $102,079

Actual median income: $55,221

Income gap: $46,858

  1. Victoria

Average home price: $633,386

Income required: $86,400

Actual median income: $47,041

Income gap: $39,359

  1. Abbotsford

Average home price: $590,900

Income required: $80,604

Actual median income: $46,714

Income gap: $33,890

  1. Hamilton-Burlington

Average home price: $550,058

Income required: $75,033

Actual median income: $51,253

Income gap: $23,778

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