The Ultimate Guide for Single-Income Apartment Buyers in Canada
The quest for a home in Canada, particularly for single-income buyers, can be an uphill climb. However, knowing where to look and what to consider can make this quest easier. This guide will help you analyze the Canadian housing market in-depth, emphasizing Toronto houses for sale.
Current Scenario
In June 2023, Canada’s housing market saw a 3% drop in average home prices due to a Bank of Canada rate hike; resulting in an average home price of $709,218.
Despite this, prices remain 7% higher than last year. As per recent trends, the Canadian housing market is experiencing an upsurge in prices and an inventory shortage. This trend began in Spring 2022 with rising interest rates, which made mortgages costlier, and demand go down. Though monthly prices have fallen, Ontario and British Columbia maintain a yearly price increase.
June 2023 had 40,449 home sales, with the benchmark price at $760,600—up 1% from the previous month. A slight sales decline in July 2023 contrasts with a significant 8.7% annual increase compared to July 2022.
In a market racked by rising prices and limited inventory, affordable apartments offer a feasible option for single-income buyers.
Affordability Index
A recent investigation by an industry leader has unveiled the most; and least affordable markets for single-income apartment buyers in Canada. The agency used March 2023 benchmark prices from the Canadian Real Estate Association (CREA) to calculate the minimum down payment required for an apartment in 15 cities nationwide.
The Most Affordable Cities
The analysis shows that the most affordable markets for single-income apartment seekers are primarily in the prairie provinces. The top three cities are:
1. Edmonton tops the list with a benchmark apartment price of $183,100. With a median after-tax income of $42,800, a potential buyer must save for just 2.6 months to afford the required down payment.
2. Regina is the second most affordable city, with single-income earners making $42,400 required to save for 2.9 months to afford the down payment for a benchmark apartment priced at $208,200.
3. In Saskatoon, a single-income buyer with a $40K median income must save for 3.4 months to afford the down payment on an apartment (benchmark price of $225,500).
The Least Affordable Cities
Conversely, the least affordable markets are in British Columbia and Ontario. To no one’s surprise, Vancouver and Toronto top the list.
With a benchmark apartment price of $737,400 and a median income of $42K, potential buyers must save for 13.9 months to afford the minimum down payment of $48,740 for Vancouver condos.
Toronto has some of the most expensive real estate, with a benchmark apartment price of $703,700. Single-income buyers earning $41,200 would need to save over 13 months to afford the minimum down payment for a condo.
Other Key Markets
Other key markets can be considered besides the most and least affordable cities. Saint John, New Brunswick, and Regina, Saskatchewan, have been identified as crucial hubs of affordability; despite their median incomes being smaller than those in the major cities of British Columbia or Ontario.
The scenario is similar in Kitchener, another city in Ontario. Kitchener houses for sale are currently witnessing a steady demand; mainly due to their relative affordability compared to Toronto and Vancouver.
Challenges in Housing Affordability
The home affordability crisis and inventory shortage in the housing market have created significant challenges for single-income buyers. Major markets such as Vancouver and Toronto, with average home prices of $1.203 million and $1.171 million, respectively, need help with housing affordability. Home purchases are largely out of reach for most Canadians, prompting the new federal housing minister, Sean Fraser, to address these issues head-on.
Future of the Canadian Housing Market
The Canadian housing market has shown signs of stabilization since May 2023, with sales levelling off and new listings coming in more normal numbers. This has given buyers more choices and balanced the market, which, as of August 2023, also started slowing the price growth rate. Future trends depend on the measures taken by the government to address the housing affordability crisis and inventory shortage.
Summing Up
In conclusion, while buying a house on a single income in Canada is challenging, it’s not impossible.
Knowing where to look and understanding the market trends can go a long way in helping you make an informed decision. Remember, whether looking at Toronto houses for sale or Kitchener houses for sale, proper research and patience are your best assets in this journey.
