Anyone hoping to afford to buy a home in Montreal needs to save for a little over three years.
According to a new National Bank of Canada data report on housing affordability, prospective Montreal condo owners would need a minimum household salary of $67,750 to be able to put a down payment on the average Montreal condo — priced at $332,230.
The National Bank of Canada has priced the average non-condo residence in Montreal at a modest $446,648. To afford that, buyers will need an average household income of $91,083 and about 39 months’ worth of savings — that’s just over 3 years.
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These lengthy savings times were calculated based on the assumption that buyers would be saving 10% of their annual income and paying the minimum possible downpayment.
If an individual had a higher income or was to set aside a larger percentage of their salary, it would significantly change the time needed to save up.
“Montreal saw the median home price for all dwellings combined rise 6.1% in the quarter on jumps of 6.6% and a 3.5%, respectively, for non-condo dwellings and condos,” says the report. “An increase in the median annual income (+1.3%) and lower interest rates were not enough to offset higher home prices (MPPI*up 0.4 pp). Unlike what transpired in the non-condo segment (+0.6 pp), the situation did improve in the condo segment (-0.3 pp). Year on year, Montreal registered the second weakest decline in MPPI* (-0.5 pp) of the ten urban centres covered after Ottawa/Gatineau.”
While it might seem daunting, people need to only save for 39 months to buy a home in Montreal, compared to a staggering 409 months in Vancouver and 289 in Toronto.
According to the report, overall housing affordability — a ratio of housing costs to total household income — actually went up in Canada during every quarter of 2020. The trend does appear to be slowing down thanks to soaring real estate prices.
“The improvement this quarter was much less impressive,” the report reads. “Higher incomes and record low-interest rates were almost completely offset by a substantial rise in home prices.”
So forget those Poutine Week deals — start saving for a house instead.