![Here's how much you need to earn to buy a home in Canada right now](https://dpdajlq3ew794.cloudfront.net/20230621094502/homebuying.jpg?format=auto&width=1920)
A new report from Ratehub.ca calculates how much money you need to make to buy a home in Canada and puts Canada’s housing affordability into perspective for May 2023.
According to the Canadian Real Estate Association (CREA) and Ratehub experts, the housing market is “well on the road” to post-pandemic recovery and 70% of Canadian markets are experiencing a “strong rebound” in demand.
CREA stats show that 54,241 homes were sold across Canada in May — an increase of 5.1% from April. This also marks the first year-over-year growth recorded since June 2021. The earlier homebuying lull may also be attributed to all the interest rate hikes from the Bank of Canada to cool down inflation.
Even though the national average home price has grown for the first time in 12 months, it is still much lower than the February 2022 peak of $816,720. The average home price increased by 3.2% in May to $729,044.
Ratehub has studied home affordability in major Canadian cities for years, and the numbers look very different this time.
![money](https://images.dailyhive.com/20230621081422/Home-Affordability-Report-May-2023-scaled-1-e1687362725990.webp)
Ratehub.ca
“Despite a higher national average home price, affordability has improved annually, as today’s market conditions are more comparable to last May’s when the Bank of Canada’s hiking cycle was well underway,” Ratehub noted.
The amount of money you need to make to buy a home dropped across most major cities, with the only two outliers in Ratehub’s study being Halifax and Calgary.
Those in Halifax must make $109,350 — $3,400 more than last year’s requirement — to afford a home, even though the average home price has dropped by $9,500. This dip pales in comparison to most other markets.
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Alberta
In May 2022, Calgarians hoping to buy a home needed to make $103,930 per year to afford one but will now need an extra $7,420 in their take-home income. This is mainly because the average home price increased (🔺$13,600) to $540,700.
Of all cities studied, Edmonton had the second-lowest income to buy a home after a $2,230 dip — $81,250 per year. The average home price fell from $406,100 in May 2022 to $372,100 last month.
Ontario and Quebec
The most significant drop in average home price (🔻$105,200) occurred in Hamilton, Ontario. As a result, the income needed to buy a home decreased (🔻$171,330) but remained relatively high compared to most other cities.
Even with an $85,600 drop in home prices and a measly $3,450 drop in required yearly income, Toronto boasted the same old unaffordability. You will still need to make an unrealistic $222,600 a year to make your dreams a reality.
The average home still costs over a million in Toronto — $1,164,400.
In Ottawa, however, you will need $130,000 (🔺$4,670) per year for the same, and the average home will set you back a relatively reasonable $645,400.
Montreal didn’t see a major difference in income needed to buy a home year-over-year (🔻$540), but home prices dropped significantly (🔻$32,100).
British Columbia
Only three cities are ahead of Hamilton in terms of high yearly earning requirements, and two of them are in BC — Victoria ($171,600) and Vancouver ($226,800).
Last year, the average home in Victoria was inching close to the $1 million mark, but prices have cooled to an average of $878,600. Though the income needed to buy one is generally high, it is still $7,160 lower than last year.
However, Vancouver takes the cake when it comes to lacking affordable housing.
The income needed to buy the average home only dropped by $590, even though the average home price dropped by $69,700 to $1,188,000.
Last year, this figure stood at a startling $1,257,700.
How are you feeling about homebuying in Canada? Let us know in the comments below.