Toronto ranked one of North America's least affordable cities for housing

Mar 28 2019, 3:33 pm

Torontonians definitely aren’t alone when it comes to their frustrating real estate woes.

When looking at housing affordability across the country, it’s no secret that Toronto is one of the worst cities for pricing, however, housing costs are much steeper for Canadians living on the west coast.

But how does housing affordability pan out across North America?

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A recent study by Zoocasa examined home affordability relative to incomes and found that Canada’s largest markets rank just as high as the hottest ones in the US–including those that have seen prices recover beyond their pre-recession peaks.

Based on December 2018 home prices, a 20% down payment, and a 30-year mortgage at a fixed rate of 3.75% for Canadians, Zoocasa ranked 35 North American cities from least to most affordable based on the difference between actual median household incomes and the income required to buy the median-priced home.

Housing affordability in the big smoke

Real estate in Canada’s largest city ranked 11th overall, with unaffordability on par with Miami.

A Torontonian earning the median income of $65,829 (USD $49,495) faces a gap of $25,431 (USD $19,121), while households in Miami earn the median income of USD $33,999, they still fall $20,733 below what they’d need to earn to qualify for a mortgage on the median-priced home.

Out of all 35 North American markets included in the study, 18 are considered to face such an income gap, according to Zoocasa.

Zoocasa (All prices are in US dollars)

When it comes to affordability, three of the Canadian cities studied are considered affordable, compared to 14 American cities.

Montreal ranks 20th on the list and has an income surplus of USD $4,161, in line with Las Vegas and Philadelphia, which have income surpluses of USD $3,215 and USD $6,869, respectively.

Ottawa, was the sixth most affordable city in the study, with an income surplus of $27,714 (USD $16,326 ), based on the median income of $85,981 (USD $64,647).

Calgary real estate is the most affordable of all the studied markets, with an impressive surplus of $40,297 (USD $30,298) and a median household income of $97,334 (USD $73, 183).

Thing’s could be worse…

According to Zoocasa, the least affordable market was San Francisco, where a household earning the median of USD $96,62 finds themselves USD $140,003 short on the median-priced home valued at USD $1,360,000.

Vancouver is Canada’s most expensive housing market, falling in second place on the list, with an income gap of $99,517 (USD $74,825) compared to the median income of $65,327 (USD $49,118).

Here’s how Canadian and US markets rank according to housing affordability:

Zoocasa (All prices are in US dollars)

But don’t let these numbers discourage you, there are some cheap gems available in the GTA.

In fact, a listing has popped up for a 253-sq-ft home that costs $500,000 less than the average selling price in the GTA, which is currently $780,397, according to a recent report from TREB.

While some might call it tiny, a $200K “investment home” doesn’t sound all that bad considering the current state of Toronto real estate.

Ainsley SmithAinsley Smith

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