Here's How Much Money You Need To Earn To Afford A Home In Canada's Major Cities Right Now
How much have you got saved up?
Condos in Toronto. Right: A home being built.
With the cost of rent becoming increasingly expensive, buying a home in Canada might feel like a tempting long-term option.
However, a new report by the National Bank of Canada has revealed just how much money you're going to need to earn if you want to buy a home in one of Canada's major cities. And, let's just say, it's a lot.
Whether you're interesting in settling down in Toronto, Vancouver, Montreal, or somewhere else, you'll need a pretty hefty (and generally six-figure) salary to get yourself on the property ladder. Ouch!
How much do you need to earn to buy a house?
Let's get the bad news out of the way first. According to the report, this is the "worst deterioration" in the market in 41 years, on both a quarterly and yearly basis.
That's because in the second quarter of 2022 – April, May, and June – it cost the average Canadian about 63% of their income to pay their mortgage.
On top of that, affordability went down in all ten of the markets the study looked at.
The median home price, for all types of housing, grew in Toronto, Vancouver, Victoria, Hamilton, Ottawa-Gatineau, Montreal, Winnipeg, Calgary, Quebec City and Edmonton.
So, if you're looking to buy a home, you better have a bit saved up depending on where you want live.
How much do you need to earn to live in Toronto & Vancouver?
The most expensive markets are the usual suspects, Vancouver and Toronto, which have a median housing price of $1,394,259 and $1,306,685 respectively.
This translates to a required yearly income of $262,923 for Van City and $246,409 for the 6ix.
After that comes Victoria with a median price of $1,165,583, with a required income of $219,800.
A qualifying income of around $215,626 is required for a house in Hamilton to afford its median price of $988,619.
Meanwhile, you can nab a house in Ottawa-Gatineau for $667,420. So, all you would need is a yearly income of at least $147,484.
How much do you need to earn to buy a house elsewhere in Canada?
From here, things look a little more hopeful, but still quite expensive.
For a home in Montreal, you'll have to make around $119,904 to cover the median home cost of $537,412.
In Calgary, the median home price is $471,097, with the average required salary of $105,494.
In Winnipeg, the cost of buying would be around $410,157, with a qualifying income of about $91,484. It's one of the few major Canadian cities where a six figure income is not required to get on the property ladder.
However, the cheapest market in the study was in Quebec City, where you can nab a home for about $357,195. To buy a house here, you'll need a salary of about $79,988.
Will it get better?
While housing affordability is not looking so hot right now, many studies, including this one, are predicting that things are going to get a bit better in 2023.
Housing prices are expected to take a bit of a dip as we transition into the new year, which will hopefully be a welcome break for anyone looking to buy in Canada.
This article's cover image was used for illustrative purposes only.