Buying a home in Toronto has definitely changed compared to 30 years ago; with housing prices having skyrocketed over the years, you’ll need to do some serious saving to make a dent in that down payment. As prices rise, so do income requirements, and a new report found that in 2024, the minimum annual income required to buy an average home in Toronto has hit staggering heights.
As of May 2024, you would need to make $215,920 to afford a home in the city — a whopping 2.5 times the average income in Toronto in 2020. The amount is based on a 20 per cent down payment, 25-year amortization, $4,000 in annual property taxes and $150 in monthly heating costs.
Even more shockingly, according to the Ratehub.ca report, this number is apparently an improvement from April 2024. That month, you would need an income of $217,170 to afford the average Toronto home, $1,250 more than the May numbers. The decrease is due to the average home price dropping from April to May to $1,117,400 — a decline of $5,900 month-over-month.
There is only one other city in Canada that has us beat: Vancouver, of course, which requires residents to make $232,950 to afford a home as of May.
The report noted that Canadian markets with homes under the $1 million mark saw the most upward pressure on prices and therefore income requirements. “[T]hat relative affordability means buyers have remained active compared to some of Canada’s more expensive cities, where too-stretched affordability has led to a sluggish spring.”
Toronto was only one of two cities included in the report that saw the average home price decline month-over-month — Halifax home prices dropped by $11,000.
Still, a slight decline in prices in the city is no match for Toronto’s overarching affordability problem, especially paired with unaffordable mortgage rates despite a 0.25 per cent rate cut earlier in June.
And with the report noting that the rate cut could mean home prices heating up in the near future, it seems Toronto might be waiting for relief that is never going to come.
