What income does it take to afford a house on a national basis and in eight cities of Canada?
As Per Canadian Real Estate Association House value release in May lwt us calculate Hypothetically:
A 5-per-cent down payment and a five-year, fixed-rate mortgage at 2.99 per cent. To calculate how much income is needed to support the resulting mortgage payments, we’ll refer to the gross debt service ratio, or GDS.To carry a home and be in a position to afford other living costs, strive for a GDS of 25 per cent or less.
For that average-price home on a national basis, the mortgage payment would be $1,930. Add an estimated $333 in property tax per month and $120 in heating and you end up with $2,383, which on an annualized basis is 32 per cent of $89,363. That’s the minimum income you’d need to afford a house at the national average price.
Statistics Canada’s most recent numbers are from 2011 and they show that median family employment income was $64,730. To bring that up to 2014 levels, three years of 2-per-cent income increases were factored in. That brings the median family employment income to $68,692, which is still short of the minimum income needed to buy the average national home.
Toronto and Vancouver's median family employment income is less than half of what’s needed to afford the average house because of high house prices.
Calgary’s estimated income levels are a little below where they need to be for a family to afford the average home.
The affordability picture is brighter in cities such as St. John’s, Halifax, Winnipeg and Saskatoon because the cost of carrying an average home is much better aligned with incomes.
Montreal’s actual household income well below the estimated income required to carry the average house.
Source: Globe and Mail
As Per Canadian Real Estate Association House value release in May lwt us calculate Hypothetically:
A 5-per-cent down payment and a five-year, fixed-rate mortgage at 2.99 per cent. To calculate how much income is needed to support the resulting mortgage payments, we’ll refer to the gross debt service ratio, or GDS.To carry a home and be in a position to afford other living costs, strive for a GDS of 25 per cent or less.
For that average-price home on a national basis, the mortgage payment would be $1,930. Add an estimated $333 in property tax per month and $120 in heating and you end up with $2,383, which on an annualized basis is 32 per cent of $89,363. That’s the minimum income you’d need to afford a house at the national average price.
Statistics Canada’s most recent numbers are from 2011 and they show that median family employment income was $64,730. To bring that up to 2014 levels, three years of 2-per-cent income increases were factored in. That brings the median family employment income to $68,692, which is still short of the minimum income needed to buy the average national home.
Toronto and Vancouver's median family employment income is less than half of what’s needed to afford the average house because of high house prices.
Calgary’s estimated income levels are a little below where they need to be for a family to afford the average home.
The affordability picture is brighter in cities such as St. John’s, Halifax, Winnipeg and Saskatoon because the cost of carrying an average home is much better aligned with incomes.
Montreal’s actual household income well below the estimated income required to carry the average house.
Source: Globe and Mail
