Even if houses in and around Toronto are no longer flying off the market like they used to — the case is quite the contrary, actually — the city’s real estate continues to grow ever less affordable.
Sales are in a protracted slump and new listings are surging, making hard to sense even a hint of the old urgency the region’s market has hitherto been known for.
But still, prices are proving surprisingly indifferent to what’s actually happening on the ground, with simply the idea that there is perennial demand serving as enough to keep the city’s property as eternally overvalued as ever.
(To be fair, if you bought a slice of the GTA market for a whopping $1,334,544 two years ago — the average price for a home of any type at the time — how would you feel about having to let it go for much less?)
A new report on housing affordability across Canada shows how things worsened for buyers in nearly every city in January — in some places, considerably so, even when compared with just one month earlier.
Ratehub.ca assesses fluctuations in home prices in major Canadian markets each month, along with changes to interest and stress test rates, to calculate how much someone would need to earn per year to afford a typical piece of property.
While they found this required salary declined for five straight months in 2024, this all-important number is back on the rise again, first in December and now again in January.
Toronto saw an $8,200 jump in average home price month-over-month and thus a $1,640 increase in the annual earnings needed to buy a home, but one other Ontario city saw these two figures spike even more sharply.
In Hamilton, the average price of a home went from $798,600 in December to $819,500, a change of a whopping $20,900, which now means a resident would need to make $4,050 more each year (for a total of $174,450) to float the purchase.
Toronto, meanwhile, boasts an average price of $1,070,100 for a home, necessitating an income of $223,290.
Even for a couple with high-paying jobs, that’s pretty darn lofty. And the vast majority of singles can forget about it completely unless they’ve got a significant chunk of that price tag upfront.
Comparatively, you only need to bring in $76,470 per year to cover a mortgage in Regina, which was the cheapest city assessed, with an average home price of just $316,300 in January.
Ratehub.ca’s latest estimates for how much yearly household income is needed to buy homes in cities across Canada based on average prices and interest/stress test rates.
The calculations were based on a mortgage with a 10 per cent down payment and 25-year amortization, also taking into account $4,000 in annual property taxes and $150 a month for heating.
The average between the Big Five Banks’ 5-year fixed rates were used, though Ratehub.ca notes that many in the country could have access to lower rates, “which would have an impact on how much you can qualify for.”
The firm notes that tariffs and general political uneasiness will “put upward pressure on fixed mortgage rates, and lower the likelihood of discounts in the near future.”
Of Toronto and Vancouver specifically, it also notes that “home prices have been largely flat due to an increase in supply, but sales rose in January on a monthly basis, which tightened prices slightly and impacted affordability” — a pattern that many experts predict will continue into the year despite the economic landscape.
