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Torontonians making median income need to save for about 25 years to buy a house in the city: report

It will take Torontonians making a median annual income of $91,858 about 25 years to save for a down payment on a house, according to a new housing affordability report. But, the report also notes the real estate market is seeing improvement in affordability.

The National Bank of Canada (NBC) released its housing affordability report for the first quarter of 2023, where it analyzed the condo market, as well as other dwellings and the real estate market as a whole in 10 major cities across Canada.

The bank factored how long it takes a median-income household to save up for the cash down payment, which is measured by the number of months needed to save for the minimum payment at a savings rate of 10 per cent of its pre-tax income.

A down payment for a non-condo (detached or semi-detached house) in Toronto is 20 per cent while it’s roughly seven per cent for Hamilton, a spokesperson for NBC confirmed.

The report also looks at the monthly mortgage payment, assuming a 25-year amortization period and a five-year term.

Across the country, the report notes affordability has steadily improved, with the quarter marking the largest improvement in affordability in almost four years.

Vancouver, Toronto, and Hamilton saw the biggest price declines as well as the best improvement in affordability during this quarter. However, Toronto’s mortgage payment as a percentage of income (MPPI) is still way above Canada’s baseline, sitting at just under 83 per cent.

In the Greater Toronto Area (GTA), the first quarter of 2023 saw a second improvement in affordability after nine straight quarters of deterioration.

“The quarterly improvement of the composite index stemmed from a 2.6 per cent decline in home prices combined with a 1.4 per cent increase in income and a slight decrease in interest rates,” the report notes.

While the report suggests the GTA’s real estate marked has improved, prospective homebuyers will still be saving for a while to make a down payment on a home.

A household needs to have a qualifying income of $236,221 to afford the "representative home" in Toronto, which sits on the market at $1,163,670. With a median income salary, the report calculated it will take 304 months – roughly 25 years – of saving for the required down payment.

Meanwhile to save for a condo in Toronto, costing $695,691, prospective buyers need to save for 58 months (or just less than five years) to afford the required down payment.

Those looking to buy a single-family home in Hamilton will be saving for 93 months (or seven-and-a-half years), if they make a median income of $88,109 per year.

Hamilton’s condo market is comparably similar to Toronto’s. With the representative condo at $671,694, prospective buyers will be saving for 57 months to meet the requirement to make a down payment.


A previous version of this article inaccurately stated Torontonians making just over $236,000 will be saving for 25 years in order to afford a down payment on a house. The $236,221 figure is the qualifying income, or the income level, required to purchase a property assuming a household devotes 32 per cent of its pre-tax income for a mortgage payment. Top Stories

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