What it Takes to Buy a Home These Days
Young people really being priced out of the market
It takes a six figure household income to afford a home in the Greater Toronto Area. The exceptions are a couple of pockets of Durham where, if you’re earning a little less than $100,000 a year you can still find a starter nest.
A study being published by real estate brokerage TheRedpin shows that the average required to buy a home, anything from a condo to a detached house, is $124,153 including the income needed for property taxes & utilities.
If your household income is $76,057, you can still get a rung on the property ladder but you’re probably looking at a neighbourhood like Brock near Lake Simcoe. It’s at least 90 minutes from Toronto but it had the lowest selling price in the region the first half of the year, averaging $373,269.
It’ easy to see why first time buyers in particular fear being priced out of the market.
Not many people have the chance, especially Gen Y & newer generation, to amass a deposit that would qualify for today’s average home price.
TheRedpin study averaged home prices based on the Toronto Real Estate Boards statistics & factored in utility costs & taxes. The average selling prices include every type of home – detached, semis, townhouses & condos.
The study assumed an average 20% down payment, an interest rate of 2.49% & a 25 year amortization. Property taxes were calculated on a per municipality basis.
The study found that buyers eyeing detached houses, semis or townhouses need 17% more income to buy this year than they did last year as area home prices continue to climb faster than most people’s earnings.
Condo buyers needed an additional 6%. The highest average home prices were in York region, where King Township homes averaged $1.208 million between January & July, & in Richmond Hill, which showed a $1.066 million average price in the same period.
The average Canadian who has an average job is getting driven out of those markets completely, as well the area is especially attractive to foreign & move-up buyers, who have equity from a previous home & some additional income.
Source: MetroNews – Real Estate August 2016
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