Despite all the pomp and circumstance surrounding Toronto’s ravenous housing market, it’s not technically the “least affordable” place to buy a home in Ontario.
A recent report on Huffpost looked at nearly 30 housing markets in Ontario to compare median household incomes with average August 2018 housing costs.
Assuming a down payment of 20%, a mortgage rate of 3.14% and a 30-year amortization period, researchers uncovered the gaps between “how much money a household would need to buy a home and the amount a household actually earns.” This gap would represent how affordable that housing market actually is.
The honour of “least affordable housing market” goes to Richmond Hill, a suburb just north of the city known for expansive lots and big, single family homes.
Based on the August figures, you’d need an “income of $136,35 to purchase a home at the average price of $999,311.” But because the actual median income in Richmond Hill is just $88,353, there is a $47,962 affordability gap of sorts, and it’s the largest in the province.
Looking at Toronto, figures showed a lower median income of $65,829, but comparatively more affordable homes, down about $200,000 from prices in Richmond Hill. With Toronto’s average housing price of $785,223, thanks to cheaper options like condominiums, the affordability gap showed $41,282.
Richmond Hill doesn’t have many of the cheaper housing options found in mixed-income cities like Toronto. Richmond Hill might be considered a destination for the wealthy; for those seeking statement properties, like-minded communities and big homes.
In terms of Ontario’s most affordable housing markets, homebuyers are urged to look outside of the Greater Toronto Area. Thunder Bay scored as the most affordable real estate market in the province; average home prices there came in at $227,750 for August.
With Thunder Bay’s median income of $66,163 (above Toronto’s), you’d need around half of that to qualify for a mortgage. Since only $31,067 is required to purchase a home in Thunder Bay, there’s an affordability surplus of $35,096 based on median incomes.
Sudbury and Ottawa round out the top three most affordable Ontario markets, according to Huffpost.