How do you think, how much money you need to afford a home in Montreal? And in Toronto and Vancouver?
A new study by Zoocasa, a popular Canadian real estate site, shows that you have to earn a fair amount of money to buy a home in Canada. This is bad news for all young people who are thinking about buying their first home, as most of them cannot even put enough monthly money towards retirement.
The experts have analyzed the level of income that potential buyers need to make in order to afford a house in different Canadian cities. The calculation was made on the basis of a 20% down payment and a 3.75% mortgage rate over 30 years. House prices were sourced from various real estate sites.
Unfortunately, only 10% of Canadian city dwellers can afford to buy an apartment under these conditions, let alone a house. In Vancouver, this share is even lower — 2.5%. It is worthy to note that the home affordability situation in Montreal is much better than in Vancouver and Toronto. For instance, to buy a house in Montreal, you need to make C$53,000 per year against a whopping C$125,000 in Toronto.
Toronto
The average house price in Toronto is C$873,100. This means that to afford a house, you need to earn at least C$124,554 per year or C$60 per hour. If you want to buy an apartment, your prospects are a little better. The average apartment price is C$522,300. To buy it, you need to make at least C$74,476 per year or C$36 per hour.
Montreal
In Montreal, the prospects are more encouraging. The average home price here is C$375,000. Approximately 50% of residents can afford to buy a home — against 10% in Toronto. It is sufficient to earn C$53,472 per year or C$25 per hour. In fact, Montreal is one of the most affordable cities to live in Canada.
The average price of an apartment in Montreal is C$296,600. This means that your salary must be at least C$42,293 per year or C$20 per hour. At that price, you may as well buy a house, right?
What does all this mean for your future? If you are planning to buy a house, do not move to Toronto or Vancouver, unless you are among those who earn hundreds of thousands per year. Perhaps you should consider moving to Montreal or any city in Manitoba, Saskatchewan or Alberta, where housing prices are among the most affordable in the country.