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Is your salary enough to buy a home in these Canadian cities? Here’s how much you need to earn based on June real estate data.
We have some good news for would-be Canadian home buyers: slightly lower mortgage rates and a dip in home prices have made it easier to purchase a property in nearly half of the nation’s major markets.
This is according to the latest monthly affordability report from Ratehub.ca (Ratehub.ca and MoneySense.ca are both owned by Ratehub Inc.) The study crunches the income required to purchase an average-priced home across Canada, using national real estate data from May and June this year, as well as mortgage and stress test rates. This makes it possible to track how affordability conditions are evolving on a monthly basis, and how specific markets are impacted by trends in borrowing costs.
The June data reveals that buyers needed less income to qualify for a mortgage in six of 13 markets studied. This reflects a small decline in the average five-year mortgage rate, from 5.49% to 5.47%, and an accompanying mortgage stress test of 7.47%. Mortgage rates lowered somewhat over the course of the month. Variable mortgage holders saw their monthly payments fluctuate due to the Bank of Canada (BoC) rate cut on June 5th, while some lenders discounted their fixed mortgage rates in response to lower bond yields.
The average national home price also softened slightly in June. The Canadian Real Estate Association (CREA) suggests that it came in -1.6% on a year-over-year basis to $696,179. This was largely due to the built-up glut of inventory (available listings rose 26% annually), which well offset the modest sales uptick between May and June. These price declines were notable in Canada’s most expensive markets, which led the way in terms of improved affordability.
Let’s take a look at what this means for Canadian home buyers where affordability improved and worsened.
Where in Canada is owning a home becoming more affordable?
Home sales came in well below the region’s long-term average in the Hammer, with a scant 835 sales in the month of June. The Real Estate Board of Hamilton-Burlington released the following statement: “This slowdown in sales is evident across all property types and in every area within the region,” as high interest rates continue to restrict affordability. Meanwhile, the inventory of homes for sale sits a whopping 54% higher than it did last year. All that has put a damper on the average price of a home in Hamilton, which plunged $18,400 between May and June to $849,900. As a result, a Hamilton home buyer needs to earn $3,550 less a year than they did last month to qualify for an average-priced home.
While Toronto continues to be among Canada’s most expensive markets, a deepening supply-and-demand imbalance has led to falling prices in recent months, and June was no exception. Home sales in the six fell nearly -17% in June and -11% from May, while Toronto sellers continued to heap on supply with the number of newly-listed homes rising by 12.3% year over year. As a result, the average Toronto home price came to $1,110,600, a month-over-month dollar drop of $6,800. That means a Torontonian buyer looking to qualify for a mortgage on the average abode can earn $1,560 less a year than they did last month.
Similarly to juggernaut market Toronto, Vancouver is suffering from an onslaught of supply and a lack of urgency among buyers. June sales data show that home sales fell by -19% annually in the sea-to-sky city, with just 2,418 properties trending hands. Meanwhile new listings are up by 7%. While that has improved balance for those currently shopping for a new home, it’s not great news for sellers, as the average Vancouver home price fell $4,900 from May to (a still astronomically expensive) $1,207,100. As a result, a buyer there saw the required income to purchase a home lower by $1,250.
Where is affording a home becoming more difficult?
Halifax—and all of Nova Scotia to be fair—has been a volatile housing market in recent months, flip flopping between the least to most improved and back again within the last three months of the Ratehub study. This month, home prices in Halifax have increased enough to position it at the top of the leaderboard in terms of eroding affordability, with the average home price increasing a whopping $9,600 month over month to $548,800. That in turn has pushed the required income for local buyers up by $1,560. The Nova Scotia Association of Realtors reports that home sales in the province remain 14.5% below the five-year average, with the year-over-year number coming in -6.4% from last June. However prices continue to rise, given the region’s comparative affordability.
While many of Canada’s largest markets have struggled to see price growth in 2024, that hasn’t touched the prairies. Cities like Calgary and Edmonton have remained piping hot and a draw for local and migrating buyers alike, due to their relatively lower home price points. Buyers continued to come out in droves in the latter with sales up 10% annually in Edmonton, while the number of new listings fell in the short term, down 14.2% from May. That resulted in an average home price increase of $8,400, to $401,100. And that translates to Edmonton buyers needing to shell out $1,380 more for the average home.
Winnipeg is another Canadian city with a comparatively cheap price tag for homes, but it’s rapidly heating up. Ror the first half of the year, home sales in the city rose 13% over 2023, compared to just a 4% uptick in new listings, according to the Winnipeg Real Estate Board. That’s helped keep the boil under prices, which rose $4,400 between May and June to an average of $362,700. That’s pushed the minimum income up by $670 for those looking to buy a Winnipeg property.
Check out the chart below to see how affordability changed between May and June in Canada’s main housing markets, based on the income required to qualify for a mortgage. The stress test rate used are 7.49% for May and 7.47% for June. Mortgage rates used are 5.49% in May and 5.47% in June.
| City | Average home price in May | Average home price in June | Change in price | Income required May | Income required June.47% | Change in income |
|---|---|---|---|---|---|---|
| Halifax | $539,200 | $548,800 | $9,600 | $111,890 | $113,450 | $1,560 |
| Edmonton | $392,700 | $401,100 | $8,400 | $85,540 | $86,920 | $1,380 |
| Winnipeg | $358,300 | $362,700 | $4,400 | $79,350 | $80,020 | $670 |
| St. John’s | $340,900 | $345,200 | $4,300 | $76,210 | $76,880 | $670 |
| Fredericton | $304,500 | $308,200 | $3,700 | $69,660 | $70,230 | $570 |
| Montreal | $534,300 | $537,700 | $3,400 | $111,010 | $111,460 | $450 |
| Calgary | $587,100 | $589,000 | $1,900 | $120,520 | $120,670 | $150 |
| Regina | $320,000 | $318,100 | -$1,900 | $72,450 | $72,010 | -$440 |
| Victoria | $874,300 | $872,800 | -$1,500 | $172,180 | $171,650 | -$530 |
| Ottawa | $651,300 | $647,700 | -$3,600 | $132,060 | $131,210 | -$850 |
| Vancouver | $1,212,000 | $1,207,100 | -$4,900 | $232,950 | $231,700 | -$1,250 |
| Toronto | $1,117,400 | $1,110,600 | -$6,800 | $215,920 | $214,360 | -$1,560 |
| Hamilton | $868,300 | $849,900 | -$18,400 | $171,100 | $167,550 | -$3,550 |
The Ratehub study looks at how home affordability conditions are changing on a short-term basis, based on what’s happening in the mortgage market, as well as regional fluctuations in prices. Canadian home buyers who wish to calculate their own affordability, or are shopping around for the best mortgage rate, can use the MoneySense mortgage affordability calculator, which personalizes outputs based on income, existing bills and debt obligations, as well as overall debt ratios.
In general, it’s a time of optimism for the mortgage market. The BoC implemented its first rate cut since 2020 on June 5th, breaking an 11-month long rate hold. It appears poised to lower rates again on July 24, based on promising inflation data in Canada and in the United States.
While this first rate cut—which shaved 0.25% off the BoC’s benchmark rate, bringing it to 4.75%—didn’t do much to move the affordability dial for borrowers, a few additional downward cuts could certainly have a bigger impact.
While those with variable-rate mortgages will certainly feel the change the most (their mortgage rates fluctuate directly with the Bank of Canada’s rate movements), rate cuts also tend to lead to downward movement among bond yields, which lenders use to set the pricing for their fixed mortgage rates. If you’re currently on the hunt for the best mortgage rate, keep your eyes open and connect with a mortgage professional, who can help navigate the options.
Check this table to compare mortgage rates in Canada right now.
This is an unpaid article that contains useful and relevant information. It was written by a content partner based on its expertise and edited by MoneySense.
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