How Much Do You Need to Buy a House in Cities Across Canada

The topic of Canada’s housing market is in the national news on an almost daily basis, and even globally, with year-over-year increases of close to 10% in markets like Toronto and Vancouver. In fact, the Canadian housing market rise outstripped all but 3 other global markets!

Some factors which has led Canada to rank fourth place among the world’s hottest real estate markets include;  the lower Canadian dollar which has increased foreign interest and demand for Canadian real estate.

Coupled with the weaker Canadian dollar, is the Bank of Canada’s keeping of interest rates low, which in-turn has helped fuel the rise in housing costs across the country.

And to top it off, Canada Mortgage and Housing Corporation announced in September 2015 the new CMHC Flexibilities for Affordable Housing – allowing new home owners to use 100% of gross rental income of secondary rental suites when applying for CMHC insured mortgages (*restrictions apply to this new provision so readers should refer to the CMHC website for more detailed information on this new provision).

Many regulators,  economists and investors are watching Canada’s housing market closely with varying views and perspectives on the final outcome. Some are speculating a “crash to come“,  while other well respected real estate investors like Canada’s largest Real Estate Investment Trust’s CEO, Edward Sonshine of RIOCAN,  who feel there is little risk of a correction while the vast majority of property is in responsible hands.

Given all the speculation around the housing market, many financial advisors are trying to provide their best advice for their clients, whether they are renters thinking about purchasing their first home, or current home owners or retirees who might be looking to downsize and wondering if this is the right time to sell and reconsider their financial planning.

The Canadian Real Estate Association (CREA) recently published median home prices for cities across Canada. As expected, cities like Vancouver and Toronto topped the list with the average price for a home in Vancouver coming in at $857,015. And the average price to for a home in Toronto coming in $627,395.

View RentSeeker.ca’s INFOGRAPHIC showing the average income needed to purchase a home in cities across Canada

*RentSeeker.ca will be publishing a full report on this data in the coming month(s):

For our readers benefit, we also include the average rent cost for a 3 bedroom apartment in the cities listed below for cost comparison purposes:

To view the average rents for apartment rentals across Canada, you can view the full RentSeeker.ca data from our recent INFOGRAPHIC – The Average Cost of Renting an Apartment in Cities across Canada.

Here is a snapshot of some preliminary data for 5 cities across Canada showing the current 2015 average home prices compared to 2014, with Year over Year (Y-O-Y) percentage increases.

• Toronto

2015 –  $627,395

2014 –  $575,676

Y-O-Y increase: 9.4%

Average Rent for a 3 Bedroom Apartment in Toronto  – $1,495 (per month)

• Vancouver

2015 –  $857,015

2014 – $836,735

 Y-O-Y increase:  2.4%

Average Rent for a 3 Bedroom Apartment in Vancouver – $1,369 (per month)

• Ottawa

2015 – $366,145

2014 – $357,753

Y-O-Y increase: 2.3%

Average Rent for a 3 Bedroom Apartment in Ottawa – $1,482 (per month)

• Montreal

2015 – $343,452

2014 – $329,574

Y-O-Y increase: 4.2%

Average Rent for a 3 Bedroom Apartment in Montreal – $920 (per month)

• Winnipeg

2015 –  $274,541

2014 – $263,859

Y-O-Y increase:  4.0%

Average Rent for a 3 Bedroom Apartment in Winnipeg – $1,205 (per month)

Readers can utilize websites like RateHub.ca‘s Mortgage Affordability Calculator to determine the income required,  the estimated mortgage payment, as well shop mortgage rates.

Most of Canada’s “big banks” offer tools for users as well, including:

• CIBC
• TD Canada Trust
• Scotia Bank
• Bank of Montreal
• Royal Bank of Canada

There are of course other costs to keep in consideration as well when making a decision to purchase a home. Here is a great article from Romana King of MoneySense Magazine providing some great information for consideration.

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