It’s tough news for homebuyers and bank accounts — you need to make a LOT more money to buy a home in Toronto compared to just a few months ago.
Using March 2022 and June 2022 real estate data, Ratehub.ca has calculated the minimum annual income needed to buy a home in Canada’s major cities.
Back in March, the minimum required income to buy a home in Toronto was sitting at $210,750.
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Changing mortgage rates, stress test rates, and real estate prices have now impacted the income needed to buy a home. While the average price for a Toronto home went down to $1.204,900 from $1.335,00, the minimum income required to buy a home in TO shot up to $226,500 in June, a near 16% increase.
Across Canada, homebuyers would have to earn between $8,660 and $35,760 more in additional annual income to buy a home in June compared to March.
“Home prices will need to drop significantly in order to neutralize the effects that higher mortgage rates have on the stress test. Unless this happens, home affordability will continue to be impacted significantly by the current rising rate environment,” said James Laird, co-CEO of Ratehub.ca.
The site stated that even as home prices started to cool across the country, rising mortgage rates continue to push the stress test upward, thereby making it more difficult for Canadians to afford a home.