How Much You Need To Make To Afford A Home In 8 Canadian Cities

Home prices are down but the income you need to afford one is going up. According to a new assessment by mortgage brokerage Ratehub.ca, the income needed to purchase a home went up between $5,750 and $23,350 in Canada's eight largest cities in the last year.

Ratehub.ca calculates those incomes by evaluating average home prices in each real estate market and the average mortgage rate among the country's five largest banks. It then adds a "stress test," which measures whether a buyer can continue to afford their home if rates were to increase.

In the January 2023 calculations, Ratehub.ca applied a 5.37% mortgage rate and a 7.37% stress test rate. The site also assumes a 20% downpayment, $4,000/year in property taxes, and $150/month in heating expenses.

In Montreal, the site put the average home prices at $498,000 in January 2023 based on data from the MLS Home Price Index. Despite a $29,000 decline in the average price since January 2022, Ratehub.ca found that a Montrealer would need about $11,360 more in annual income to afford a home in January 2023 thanks to higher mortgage and stress test rates.

That brings the necessary income to a whopping $103,560.

Perhaps unsurprisingly, Vancouver was the major Canadian city in which residents needed the highest income, $212,800, to afford a home of average price ($1,111,400) in January 2023, according to Ratehub.ca's criteria.

Toronto followed with an average home price of $1,078,900 and a necessary income of $207,000.

Next were, Ottawa ($603,900 average January 2023 home price; $122,440 in income necessary), Calgary ($509,900 home price; $105,680 income), Montreal, and Halifax ($490,700 home price; $102,260 income).

Of the eight largest cities it assessed, Ratehub.ca found that only in Edmonton, with an average January 2023 home price of $362,200, and Winnipeg, with an average home price of $323,600, were the incomes needed to afford a home under $100,000: $79,370 and $72,500, respectively.