Here's what income bracket you need to be in to afford a home in Toronto

Trying to buy a home in one of Canada’s most expensive cities continues to be a struggle for many, as the cost of living continues to soar and wages struggle to catch up.

Even though home prices are on a downward trend across the GTA, the average home in the region will still cost you a mind-boggling $1.1 million, making dreams of owning a property one day difficult to achieve by the average worker.

A recent study by Zoocasa analyzed 16 different census municipalities in Canada, including Toronto, and compared the prices for a single family, townhouse, and condo apartment to different income groups, from the top 50% of earners all the way to the top 0.1%.

The study found that prospective buyers have to be in the top 1% of earners to afford a single-family home in Toronto.

Affordability in each municipality was gauged by how much income was required to afford a home at a benchmark price.

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House prices were sourced from the Canadian Real Estate Association, and the minimum income required was calculated using the Ratehub calculator, assuming a 20% down payment, 30-year amortization, and a 4.69% interest rate.

The study identified the benchmark house price for a single-family home in Toronto in February 2023 as $1,294,100.

This means prospective buyers would have to be in the 1% of earners or earn an income of $200,063 to afford this type of property.

To afford a townhouse in Toronto at the benchmark price of $796,000, the study found that buyers would have to be in the top 5% of earners or earn an income of $123,075.

The benchmark price for a condo apartment in Toronto was by far the cheapest at $695,000 in February 2023.

However, this means prospective buyers will still need to be in the top 10% of earners or receive an income of $107,438 to afford this type of property.

The only other Canadian city that topped Toronto in each category was Vancouver, where the benchmark price for a single-family home in February 2023 was a whopping $1,811,900, setting the income requirement for this type of property at $280,125.