As the cost of Toronto-area housing rises, so do the financing challenges for young adults. Report says $200,000 a year is the average income needed for a detached house in Toronto.
It takes a six-figure income to afford virtually any Toronto area home — even a condo — and that expense is presenting a considerable financial challenge to an important cohort of millennial consumers.
Separate studies from two real estate companies on Thursday paint pictures of the high income requirements of affording a home, and of the housing aspirations of Canada’s “peak millennials” — adults 25 to 30.
It takes a household income of more than $200,000 a year to carry the $1.15 million cost of the average detached house in the Toronto region, according to a report from TheRedPin brokerage.
Even the average condo apartment, costing about $511,000, requires an annual income of $92,925 to afford a $1,933 monthly mortgage, plus taxes, utilities and condo fees, according to the report.
Meantime, 59 per cent of those aged 25 to 30 in Ontario would like to own a detached house in the next five years, but only 30 per cent think they will be able to afford one, according a new Royal LePage report based on findings by Leger research.
According to TheRedPin, buyers need more than $150,000 a year to cover the cost of a home in half of 22 Toronto area municipalities.
The average Toronto home price, $864,228, is affordable to buyers with an annual income of $147,750 — though that average may be skewed lower by the large number of condos on the market.
The most expensive real estate in the region is in King Township. Buyers there need $264,000 a year to afford the monthly mortgage of $5,883 and other expenses for an average home price of $1.6 million.
By TESS KALINOWSKIReal Estate Reporter
Thu., Aug. 17, 2017