It’s a common narrative in Canada’s hottest housing markets: with home prices climbing stratospherically over the last five years and a mortgage stress test now in place, homebuyers are seeing their purchasing power chopped more than ever - especially young families and first-time buyers.
However, it’s even more challenging for those trying to break into the market on their own; not only does having two or more incomes go a long way in a homebuying budget, but it can also ease the mortgage qualification process. Single buyers may feel discouraged that they simply can’t muster the funds to satisfy this lending criteria on their own.
All by myself: Half of Canadian markets still affordable
Fortunately, according to recent calculations by Zoocasa
, this isn’t the case everywhere – out of 20 markets studied, half can still be considered affordable for a single buyer earning a median income.
To find which markets were within the realm of affordability for solo buyers, the study sourced average home prices from each market’s respective local real estate board. It then applied a mortgage calculation, based on a 20% down payment, 3.29% mortgage rate and 30-year amortization, to determine the minimum income needed to afford the average priced home in each city. That amount was then compared to the actual median incomes for “persons who lived alone who earned employment income” as reported by Statistics Canada.
The findings reveal single buyers will get more bang for their buck in the Prairies and Eastern Canada. Regina took the top spot for best overall affordability; there, a buyer earning the median of $58,823 would be able to qualify for the average home priced at $285,424 with a $20,025 income surplus left over. This surplus represents financial wiggle room, meaning the buyer isn’t maxing out their affordability on their real estate purchase. Other affordable cities for singles include Saint John, Edmonton, Lethbridge, Winnipeg, and Halifax.
West Coast, GGH, least affordable for single buyers
Not surprisingly, Vancouver was ranked as the least affordable market for solo buyers; a median income of $50,721 in the city falls a whopping $88,361 short of what’s needed to purchase the average priced home at $1,019,600.
, while relatively more manageable than its west coast counterpart, is still wildly outside the realm of affordability; a median income of $55,221 is $46,858 too little to purchase the average $748,328 home. Victoria, Guelph
, Montreal, and Ottawa
round out the least affordable markets for singles.
Affordability also ranges by age group
The research also compared how earnings ranged by age group per location, and which demographic enjoyed the greatest affordability when purchasing a home. Across every market, Gen Xers (35 – 44 and 45 – 54 age brackets) enjoy the greatest earnings and purchasing power, with 11 markets considered within affordable reach (compared to 10 markets across all age groups). Millennials (aged 25 – 34) had the least earning power in each city, behind Boomers (aged 55 – 64).
Overall, single homebuyers aged 35 – 44 purchasing a home in Regina enjoyed the greatest affordability of all, with an income surplus of $24,215. A millennial purchasing in Vancouver had the least, facing a gap of $92,774.
Check out the infographics below to see how a single buyer would fare in housing markets across Canada:
Penelope Graham is the Managing Editor of Zoocasa.com, a real estate website that combines online search tools and a full-service brokerage to let Canadians purchase or sell their homes faster, easier and more successfully across the nation, including Barrie homes for sale, Guelph homes for sale, and Kitchener homes for sale. Home buyers and sellers can browse listings on the site, or with Zoocasa’s free iOs app.