Canada’s Most Affordable Real Estate
The benchmark home prices in Edmonton places it ahead of many other cities due to its affordable real estate market. A local realty firm has conducted a study of median incomes in 15 major markets throughout Canada. They have compared them to the benchmark home prices in these cities.
The maximum mortgage amount was calculated for those with median incomes in the city. They later compared the maximum mortgage to the benchmark home rate in the same city to determine if it would be a large amount to then buy. In short, at least eight cities were considered affordable. This meant that people would be able to qualify for a mortgage that would cover the majority of the cost and they could save enough for a down payment in less time. The most affordable cities include Edmonton, Regina, Winnipeg, Saskatoon, and Halifax-Dartmouth.
Edmonton ranked ahead of Calgary. It’s benchmark price is $321,300 with a median income of $94,447. Based on this information someone in the market for a new home or business would qualify for a mortgage of $317,344. This would require a down payment of roughly $16,000. It would cost the buyer almost a years savings or 20% of pre-tax income. This is reasonable for most new homebuyers. The benchmark price of a house in Calgary, which ranked sixth, is $420,500. The median household income is approximately $99,583 before taxes. This means that the median mortgage would be $415,454. If the homebuyer were to save 20% of their household income, it would take one year for them to save 5% of the price for their down payment, which would be approximately $21,000.
Most of the cities in the report were considered affordable but seven of them were not. The ones that were not considered affordable include St. Thomas, London, Kitchener-Waterloo, Hamilton-Burlington, Greater Vancouver, Greater Toronto, Victoria, and Fraser Valley. There is becoming a wider disparity between what is affordable and what is not affordable. This is based on the benchmark findings. Greater Vancouver was the least affordable market surveyed. It has a benchmark price of $993,300. However, the median income in Greater Vancouver is lower in some of the prairie provinces with an average rate of $72,652. This means that homebuyers with this amount of income will qualify for a mortgage of $241,994. To complete the deal the homebuyer would need to come up with a down payment amount of $751,306. This is 76% of the home price. This definitely isn’t the ideal situation for a homebuyer.
Fraser Valley was the second least affordable market where buyers would have to save for 42 years to purchase a home. In Greater Toronto, homebuyers would have to save for 32 years to purchase a home. The benchmark price on average in all the cities in the study was $627,400 with median prices of $70,336, which means they would qualify for a $280,703 mortgage. This would be enough to account for 55% of the price.