A new study by Zoocasa has shed light on the challenging reality for Canadian homebuyers, even those with decent incomes. The research examined whether net annual incomes of $55,000, $65,000, $75,000, and $85,000 would be sufficient to cover monthly mortgage payments on an average-priced home across various markets. The analysis assumed a flat $100,000 down payment for homes priced under $500,000 and a 20 percent down payment for more expensive properties.
Most Affordable Market: Labrador and Newfoundland
The study identified Labrador and Newfoundland as Canada's most affordable housing market. With an average home price of $352,854, a $100,000 down payment (28 percent of the purchase price) would result in a monthly mortgage payment of $1,336. This amount represents between 31 and 50 percent of a monthly net income of $3,305 for someone earning $55,000 annually after taxes.
Vancouver: The Most Expensive Market
At the opposite end, Vancouver stands as the most expensive market, with an average home price of $1,201,522. A 20 percent down payment of $240,304 would be required, leading to a monthly mortgage payment of $5,077. This payment exceeds 138 percent of the monthly net income of $3,677 for a $55,000 earner. Even with a net income of $85,000, the mortgage payment would consume 94 percent of monthly net income ($5,388), making homeownership unattainable.
Calgary and Edmonton: Alberta Markets
In Calgary, the average home price is $656,109. With a 20 percent down payment of $131,222, the monthly mortgage payment would be $2,772, or 76 percent of a $55,000 earner's monthly net income of $3,657. This suggests that $55,000 in net income is insufficient for the average Calgary home.
Edmonton, however, emerges as the most affordable major market. The average home price is $465,237, below the $500,000 threshold. A $100,000 down payment (21 percent of the price) would result in a monthly payment of $1,929, about 53 percent of a monthly net income of $3,677. While still a significant portion, it is more manageable than in other major cities.
Key Takeaways
- Canada's most affordable market is Labrador and Newfoundland, where a $55,000 net income can cover mortgage payments within reasonable limits.
- Vancouver remains prohibitively expensive, even for higher incomes.
- Edmonton offers the best affordability among major Canadian cities for those with $55,000 net income.
- Calgary's average home price requires a higher income to avoid excessive mortgage burden.
The study underscores the growing divide in Canadian housing affordability, with only a few regions accessible to middle-income earners.
