By: Zoocasa

Homeownership in Ontario cities is largely out of reach for households making the median income, with the only exception being Ottawa, according to a recently released report by Zoocasa.

The study assessed 15 Canadian cities to see how affordable it would be for the median-income household to purchase a property. The numbers reveal that buyers making the median income would have to save up massive down payments in order to qualify for a mortgage to buy Ontario real estate.

The calculations assume a mortgage rate of 3% over 25 years, with 1% of the purchase price devoted to property taxes and another $100 a month toward heating, and assumed buyers could save 20% of their income annually.

Toronto Among Least Affordable for Median-Income Buyers

Toronto was, unsurprisingly, the most unaffordable city in the province. There, a median-income household would only qualify for a mortgage of $300,174. But with average property prices at $802,400, such buyers would need to make up the difference with a 63% down payment of $502,226. That down payment would take a full 32 years to save, based on stashing away 20% of the median income of $78,373.

 Even Smaller Secondary Markets Out of Reach Financially

Hamilton and Kitchener, smaller urban centres in the province, were no better. Houses for sale in Hamilton are at an average of $613,900 while household incomes are only $74,464. That means buyers would only qualify for a mortgage of $310,732, leaving them on the hook for 49% of the purchase price to be paid in cash. That would take the median family 20 years to save up — unaffordable and unrealistic by any measure.

Similarly, houses for sale in Kitchener are slightly lower at $528,990 while incomes are slightly higher at $77,229. But it would still take 13 years to save up a big enough down payment. While 13 years is certainly better than 32 years, it’s not affordable — by the time a household had saved up enough funds, the market would have risen far, far beyond their reach. It’s a game of catch up that buyers just can’t win.

Ottawa, Prairies, Remain Feasible for Median-Income Buyers

In contrast, Ottawa remains affordable. In the capital city, home prices are just under $500,000 and salaries are high, at $86,451. Borrowers would qualify for a mortgage of $396639 and would only have to put forth an 11% down payment of $46,887, which would take a reasonable three years to save.

While Ontario remains out of reach for most, it’s a completely different story in the prairies, where homes are extremely affordable. In all prairie cities examined it would take a single year to save up an adequate down payment.

Want to see the full ranking of cities on this list? Check out the infographic below.