Here’s how much you need to earn to afford a home in Toronto right now

While Toronto’s real estate market started off sluggish at the beginning of 2024 with a notable dip in buyer demand, the second half of the year saw a dramatic shift, which ushered in a period of greater affordability for prospective buyers looking to enter the market.

As always, the city’s real estate prices were a bit unpredictable, and choosing the right month to purchase a home often meant saving money or dishing out more of your savings.

Still, according to Ratehub.ca’s December 2024 Affordability Report, affordability improved in nine out of 13 of Canada’s major housing markets in 2024, including Toronto.

If you’ve been thinking of turning your homeownership dreams into a reality, here’s a look at how much buyers needed to earn to buy a home in Toronto throughout 2024. 

The study calculated the minimum annual income required to buy an average home in some of Canada’s major cities and illustrates how changing mortgage rates, stress test rates, and real estate prices continue to impact the income needed to buy a home. 

Over the 12-month period, the average five-year fixed mortgage rate used in the study decreased from 5.71 per cent to 4.99 per cent, with a corresponding drop in the mortgage stress test from 7.71 per cent to 6.99 per cent. 

Overall, 2024 was a huge improvement compared to 2023, when affordability worsened in all 10 of the cities included in the study at the time. 

In 2024, Toronto actually saw the biggest improvement, with $12,400 less income required to purchase the average home, which was based on a combination of lower interest rates and the average home price from $1,065,30 in January to $1,061,900 by December. 

Considering the few years of built-up demand, it’s projected that home sales will rebound in 2025, as there are still a few rate cuts expected from the Bank of Canada. This projection is echoed in the Canadian Real Estate Association’s (CREA) forecast for the 2025 and 2026 real estate market. 

“The assumption remains that the combination of two and a half years of pent-up demand and lower borrowing costs, together with the usual burst of spring listings will lead to a rebound in market activity across the country in 2025,” the CREA report reads. 

“There was a good preview of what that might look like during the fourth quarter of 2024.” 

Here’s how much you needed to earn per year to buy a home in Toronto throughout 2024, according to Ratehub.ca report: 

• January: $210,200
• February: $213,950
• March: $216,920
• April: $217,170
• May $215,920
• June: $214,360
• July: $208,950
• August: $204,100
• September: $199,800
• October: $195,420
• November: $194,900
• December: $197,800