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Tuesday, 22 October 2019
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Regina Most Affordable City for Median-Income Home Buyers: Study

Written by Posted On Wednesday, 09 October 2019 08:16

By: Zoocasa


The Prairie city of Regina is the most affordable city for median-income home buyers to purchase a property according to a recently released report by Zoocasa.

Median-income households earn $84,447 in Regina while the average property is just $267,900. It would only take buyers a single year to save 20% of their income for an adequate down payment of 5%, or $13,395; a household can still qualify and afford the monthly payments on a mortgage with a 95% loan-to-value ratio, plus utilities and taxes.

A Look at 15 Cities Across Canada

Zoocasa sought to figure out how affordable Canadian cities really are, based on the median income. What size mortgage would these median income buyers qualify for and how big a down payment would they need? Based on saving 20% of their income, how long would it take them to save up for that down payment?

To do this, the study assessed 15 cities in Canada, assuming a 3% mortgage rate, and amortization of 25 years. Included in the calculation was property tax assumed to be 1% of the purchase price and heating costs at $100 a month.

Home Buyers Will Find Greatest Value In the Prairies

The study found that the prairies by far hold the most affordable cities for the median income buyer. Prairie cities like Saskatoon, Winnipeg, Edmonton and Calgary all hit that sweet spot of relatively high incomes with extremely low property prices relative to other Canadian cities. In the prairies, home buyers can easily save a 5% down payment in a year and still qualify to finance the rest. 

The only other affordable cities are Halifax and Ottawa, where it will take one year and three years, respectively, to save for the appropriate sized down payment.

Canada’s Largest Cities Among Least Affordable

On the other end of the rankings were the least affordable markets in Canada. Vancouver, unsurprisingly, came in first place. With the average Vancouver houses for sale at $993,300 and the median income before tax at just $72,662 (with residents making less than people in Toronto, Kitchener, Hamilton, Ottawa, Calgary, Edmonton, Saskatoon and Regina) it would take a full 25 years for households to save 20% of their income and stash away enough for a down payment. And even then, buyers would need a 55% down payment to be able to qualify and afford a mortgage. 

Hamilton-Burlington is the fifth least affordable city in Canada, with this smaller urban centre coming just below Toronto and Victoria. Houses for sale in Hamilton stand at $613,900 and median incomes at $75,464. Buyers would have to spend 20 years saving up a down payment of $303,168, or 49% of the total purchase price. 

In other words, the most populous Canadian cities are largely unaffordable for residents making the median salaries.

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

Zoocasa is a full-service brokerage that offers advanced online search tools to empower Canadians with the data and expertise they need to make more successful real estate decisions. View real estate listings at zoocasa.com or download our free iOS app.

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Zoocasa

Zoocasa is a full-service brokerage that offers advanced online search tools to empower Canadians with the data and expertise they need to make more successful real estate decisions. View real estate listings at zoocasa.com or download our free iOS app.

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