Looking to purchase a home in the near future? A recent report from Zoocasa reveals that you must be among the highest bracket of income earners in order to purchase a home in Canada’s most popular cities.

The two most expensive places for real estate in Canada are Toronto and Vancouver. The numbers reveal that only the top 10% of income earners in Toronto can afford to buy a house at a benchmark price of $873,100. Vancouver’s numbers prove to be even more astounding as prospective buyers must fall within the top 2.5% of income earners to purchase a house at a benchmark price of $1,441,000.

Calculations

This study, which determined the required income that buyers would need to afford a benchmark home in their city, calculated the minimum income required to qualify for a mortgage in 13 cities across Canada. This study assumed a 3.75% mortgage rate, 20% down payment, and a 30-year amortization. The numbers were then cross-referenced with income tax filings as reported by Statistics Canada to determine the income group that buyers would have to correspond with to purchase local real estate. Benchmark home prices were taken from the Canadian Real Estate Association as well as local real estate boards.

Entry-Level Housing Unattainable for Many

While high home prices might not be shocking, it is certainly surprising that entry-level real estate, including apartments and condos, is also out of reach for many. Those in Vancouver, Victoria, and Toronto still need to be among the top 25% of income earners to afford apartments in those areas. What’s more, apartments sit at a benchmark price of around $500,000 to 650,000 in these locations. Check out Vancouver condos for sale to gain a sense of the high selling prices. Buying entry-level housing in these popular cities is even more expensive than buying fully detached homes in many other Canadian markets.

Attractive Alternatives

Though some may be discouraged by these home prices, there are other Canadian real estate markets that offer attractive and affordable options for home buyers. Prairie markets in particular have moderate income requirements compared to expensive urban areas. The income study revealed that houses are attainable by the top 75% in Regina, with a benchmark home priced at $275,900. Saskatoon and Winnipeg are almost as affordable, as the top 50% of income earners can afford a home priced at $301,900 and $326,433.

For those interested in settling down in urban locations, there are still some cheaper options available. Many Ontario markets and wider Canadian markets offer the best of both worlds in terms of housing affordability and location. For example, Hamilton condos, Kitchener-Waterloo condos, and Ottawa condos offer some affordable listings while providing residents with similar amenities and economic prospects that popular urban markets offer.

Want to learn more about house and apartment prices in Canadian cities? Check out Zoocasa’s infographic above.