You now need to make a FORTUNE in extra income to afford a home in Canada
If you’re considering buying a home in Canada, you should start looking into getting a side gig for extra income.
Home prices have gone down across the nation, and home sales have hit record lows, too, but actually buying a home continues to get more and more difficult.
The Bank of Canada tremendously raised its key interest rates over the last year, making affordable mortgage a distant dream for most working-class Canadians. But that’s not all that.
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New data from Ratehub shows that homebuyers will have to earn between $5,750 and $25,500 in extra income annually to buy a home in at least nine out of 10 major Canadian cities.
RateHub.ca
Ratehub’s experts compared stress test rates, home prices, and mortgage rates between January 2022 and January 2023 to determine these numbers.
The situation is the worst in Victoria, BC. Buying a home in Victoria will require you to earn an extra income of $25,500 yearly, even though home prices during the studied period have gone down by $11,800 in the city.
Vancouver follows closely with an average extra income of $23,350 needed per year. Not only is that number completely bonkers, but it’s doubly shocking when you realize home prices in Vancouver went down by $78,600 on average over the last year.
There are two cities where home prices and the additional yearly income amount have gone up. In Calgary, you will need $23,310 in extra dough to buy a home in a market where the average home price has skyrocketed by $29,400.
If you’re considering a place in Alberta, maybe look into Edmonton ā homes have gotten $13,700 cheaper, and you’ll still need $9,340 in extra income, but that’s not nearly as much as Calgary.
But considering that homes in Calgary and Halifax are still roughly half the price of the average home in Vancouver, it seems the latter city is still being dealt the worst cards of all.
In Halifax, home prices saw an increase of $25,100, and you need $19,070 more per year, followed by Montreal, where a price spike of $29,000 was observed. Ratehub determined you would need an extra $11,360 to buy a home in Montreal.
Hamilton, Ontario, is the only Canadian city you can get by making less money. Home prices are down by $202,900, and you’ll still have an average of $4,350 to spare annually.
“With current fixed rates, the stress test is currently around 7.37%, which is over 2% higher than a year ago,” said James Laird, CEO at Ratehub. “The increase in rates is more material than the decrease in home values so far. This is why homes are less affordable in nine out of 10 cities we looked at compared to a year ago.”
He added that the present high level of mortgage rates will keep downward pressure on home prices “until affordability equilibrium is achieved.”
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