Oakville and Burlington are Officially Some of the Least Affordable Cities in Ontario
Most people are aware that it can be prohibitively expensive to purchase a home in one of the GTA's most in-demand cities.
But few are aware of how unaffordable Oakville and Burlington actually are.
A recent report by real estate brokerage Zoocasa breaks down Ontario's most—and least—affordable cities.
While most people might assume that Toronto is the province's least affordable city, Zoocasa's data suggests that Richmond Hill is the least affordable municipality.
In the town just north of Toronto, locals earning the median household income of $88,535 would find themselves a whopping $47,962 short to purchase a home at the average price of $999,311.
In comparison, a Torontonian earning the city's median household income of $65,829 would find themselves $41,282 short of the average home price of $785,223.
In many cases, a city is more affordable when it has more condos, as they’re typically cheaper than low-rise homes.
To determine which markets are most aligned with incomes, Zoocasa calculated the required income to purchase the average home in 28 major markets across the province, assuming a 20 per-cent down payment is made at a mortgage rate of 3.14% and a 30-year amortization.
Zoocasa says this amount was then compared to the actual median household income in each region, to determine whether local home buyers face an income gap or surplus when attempting to enter the market.
In the west-end GTA, Mississauga, Brampton, Oakville and Burlington all qualify as 10 of the province's least affordable cities.
In Mississauga, the median household income is $83,018. That means residents would find them themselves short $10,261 to purchase a home valued at $683,819.
In Brampton, household income sits at $87,290. That means residents would find themselves short $9,535 when purchasing a home valued at $709,818.
In Oakville, where household income sits at a more comfortable $113,666, residents would still be short $26,901 when trying a purchase a home with $1,030,482. In Burlington, household income comes in at $93,588, meaning residents are short about $11,078 when trying to purchase a home for $767,302.
The situation is better in Milton, where household income sits at $104,730 and houses cost about $732,836. That means a Milton resident can purchase a home with $4,765 to spare.
You can take a look at the numbers in the graph below:
As for what makes a home affordable, Zoocasa says a region's home affordability is dependent on home price and income alignment.
Zoocasa says a prospective home buyer perusing Ottawa real estate or London, Ontario real estate would enjoy greater purchasing power in relation to their household income, compared to a household in Mississauga who would incur a $10,000-gap in their budget.
So, what are the most affordable markets?
1 - Thunder Bay
Average Home Price: $227,750
Required Income: $31,067
Median Income: $66,163
2 - Sudbury
Average Home Price: $272,523
Required Income: $37,174
Median Income: $68,736
3 - Ottawa
Average Home Price: $433,684
Required Income: $59,158
Median Income: $85,981
4 - Whitby
Average Home Price: $632,395
Required Income: $86,264
Median Income: $103,809
5 - Waterloo
Average Home Price: $493,358
Required Income: $67,298
Median Income: $83,045
So, who's moving to Thunder Bay?