While average home prices dropped by over $178,000 since last January, required annual income needed to crack into the market has gone up.
A for sale is sign is displayed in front of a house in the Riverdale area of Toronto on September 29, 2021. THE CANADIAN PRESS/Evan Buhler
“Home prices are down, but affordability is worse than 12 months ago,” James Laird, Co-CEO of Ratehub.ca and President of CanWise mortgage lender said in a release. Even though average home prices plummeted by over $178,000 since last January, those looking to buy property in Toronto need to make at least $207,000 a year to crack into the market – a $7,620 rise in required annual income., causing strain on prospective homebuyers in qualifying for a mortgage given how high borrowing and stress test rates are, the report notes.
As a result, the minimum income required to buy a home in the city – based on a 20 per cent down payment for a mortgage with a 25-year amortization period – decreased by $4,350, with prospective homebuyers needing to make at least $159,100 per year in 2023., real estate market analysts are unsure of how everything will play out in the coming months, given how unaffordable housing is.
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