If you don’t think you’ll ever be able to buy a home in Montreal, you’re not alone. In fact, nearly half of Canadians have given up on the dream of homeownership altogether, as high mortgage rates and the high cost of living loom large. But have you ever actually tried running the numbers?
How much money would you need to earn if you wanted to purchase a home and how does this compare in different cities and provinces across Canada? If you can’t afford a house in Montreal, but you could afford one in Newfoundland, would you consider moving there?
A new report by Peakifi can help you answer those questions. It reveals the monthly and yearly income you’d need to buy a “typical home” across Canada, breaking it down by city and province.
“Several factors impact the total cost of purchasing a house in Canada — which will directly impact the household income needed to purchase a house,” writer James Hoss says in the report. These include: home price, mortgage rates, down payment, and the “stress test” that financial institutions use to ensure you could continue making mortgage payments if the interest rate increased.
A map and chart show the income needed to purchase a home in every province and some major cities in Canada. Peakifi
For the purposes of this study, a “typical home” is one that’s listed at the average price in the region for January 2024. Peakifi then accounted for the minimum down payment that would be required and the resulting mortgage payments at a rate of 5.61% over a 25-year amortization period. The traditional rule of thumb is that a mortgage payment should not exceed 32% of your gross annual income (i.e. pre tax and deductions), which was factored into Peakifi’s calculations.
Keep in mind that the figures are based on household income rather than individual income — so the combined total earnings of every contributing member of your household.
According to the report, the provinces where you’d need to make the most money to afford a “typical house” are British Columbia and Ontario, which require annual household incomes of $211,416 and $191,880, respectively.
This isn’t super surprising when you think about those province’s biggest cities where the numbers are even higher. Buying a home in Vancouver requires you to make $236,210 per year (or $19,684 per month) and a home in Toronto requires $236,588 per year ($19,716 per month).
The most affordable provinces for home ownership are New Brunswick and Newfoundland and Labrador, which require the country’s lowest household incomes of $57,432 per year ($4,786 per month) and $57,420 per year ($4,785 per month) in order to purchase a typical home.
So, how does our own fine city of Montreal compare? If you want to buy a house here, you should be making $107,273 per year or $8,939 per month. That may seem like a lot, but out of 12 major Canadian cities named in the report, Montreal is actually the third most affordable after Winnipeg and Edmonton.
Here’s a list of all the major cities highlighted in the report, ranked from lowest to highest annual household income required to purchase a typical home:
- Winnipeg
- Edmonton
- Montreal
- $107,273/year
- $8,939/month
- Calgary
- $107,910/year
- $8,992/month
- London
- $114,318/year
- $9,562/month
- Kitchener-Waterloo
- $139,880/year
- $11,657/month
- Ottawa
- $143,124/year
- $11,927/month
- Oshawa
- $151,768/year
- $12,647/month
- Mississauga
- $213,177/year
- $17,765/month
- Brampton
- $220,966/year
- $18,414/month
- Vancouver
- $236,210/year
- $19,684/month
- Toronto
- $236,588/year
- $19,716/month
Ummm, are the Prairies suddenly looking a whole lot more appealing to anyone else?
If you want to compare any of these numbers to the nation-wide average, the benchmark house price in Canada at the time of the study was $707,800. You would need an annual household income of at least $153,127.66 to support the monthly mortgage payments of $4,082.40 without exceeding 32% of your gross annual income, Peakifi says.