Given the average house price now tops $1.3 million in the city, according to the Toronto Real Estate Board, you better have a significant nest egg if you dream of detached living. The next best option is to find a great neighbourhood with affordable townhomes.

Average Toronto Income Comes Up Short

When it comes to homebuyer affordability, the numbers can be daunting. Let’s say a borrower earns the median Toronto household income of $76,219, pays at least 20% down on their home purchase, and qualifies for a 2% variable-rate mortgage with a 30-year amortization.

Even in this best-case scenario, they’d still only be granted $636,886 in affordability by their lender. That amounts to precious little in a market where bidding wars are the norm and homes increasingly sell for hundreds of thousands of dollars over asking.

Searching Beyond City Borders

Many buyers who find themselves priced out of the market “drive until they qualify”; they’ll buy a house in a further-flung GTA community – TREB reports the average home can be found there for $795,569 – and brace for a daily car or train commute.

But suburban life isn’t for everyone. And, while raising a family in a high-rise is becoming a more common tactic (developers are even creating larger units to meet demand), it’s not an ideal situation for all.

Townhomes: The New Toronto Real Estate Reality

For buyers who wish to remain in the city but need more space, townhomes are quickly becoming the new low-rise standard. According to MLS townhouse and detached house sold numbers compiled by Zoocasa, the average detached home price skyrocketed a whopping 83.% from 2011 to 2016. By comparison, townhome prices surged only 53.3%, to an average of $562,187 – still within the realm of affordability for many Toronto buyers.

To help homebuyers on their home search, Zoocasa has identified the top 20 most affordable neighbourhoods for Toronto townhomes, along with the change in demand, and average time on the market.

Check out the infographic below to find a townhouse option in your price range

By: Penelope Graham, Zoocasa

Penelope Graham is the Managing Editor of Zoocasa.com, a leading real estate resource that uses full brokerage service and online tools to empower Canadians to buy or sell their home faster, easier, and more successfully.

There are many factors which need to be considered for both renting and buying, including understanding all the financial responsibilities for both,  the risk vs. reward, and even emotional factors which are crucial to this decision process, since for most consumers, purchasing a home is the largest investment of their lifetime.

RentSeeker.ca, Canada’s leading apartment, condo and home finder, has built a new, one of a kind, Rent or Buy Calculator to help consumers compare the costs associated with renting vs. buying.

The new Rent or Buy Calculator by RentSeeker.ca provides valuable tools including pre-inputted average rent costs for many cities across Canada which users can find by choosing a province, city and bedroom type, or users can input their own rent costs in the custom field for “Monthly Rent”.

Should You Rent or Buy? This New Rent vs. Buy Calculator Will Help You Decide!

For media inquiries or to share our new Rent vs. Buy Calculator,  please email:  media@rentseeker.ca.

(Click on the INFOGRAPHIC to Enlarge)

(*INFOGRAPHIC figures based on bank rate on 5-year fixed-rate mortgage of 2.5%; a 20% down payment; a 25-year amortization period; and added costs of property tax and heating costs).

As part of the research and report,  RentSeeker.ca looked at year-over-year comparisons from 2014 – 2015. While most provinces showed year-over-year gains, some provinces including Alberta, showed declines in home prices.

Here is the list of the average home prices for all provinces with year-over-year comparison data for 2014 vs. 2015:

• Ontario 

2014 Average Home Price: $445,500

2015 Average Home Price: $471,654

• Quebec

2014 Average Home Price: $277,789

2015 Average Home Price: $275,701

• Alberta

2014 Average Home Price: $400,027

2015 Average Home Price: $384,381

• British Columbia 

2014 Average Home Price: $575,504

2015 Average Home Price: $667,480

• Yukon

2014 Average Home Price: $275,750

2015 Average Home Price: $356,290

• Northwest Territories

2014 Average Home Price: $405,332

2015 Average Home Price: $330,708

• Saskatchewan

2014 Average Home Price: $306,812

2015 Average Home Price: $292,949

• Manitoba

2014 Average Home Price: $263,159

2015 Average Home Price: $264,739

• Newfoundland & Labrador

2014 Average Home Price: $266,346

2015 Average Home Price: $258,459

• Nova Scotia

2014 Average Home Price: $207,657

2015 Average Home Price: $206,251

• Prince Edward Island

2014 Average Home Price: $174,871

2015 Average Home Price: $163,236

• New Brunswick

2014 Average Home Price: $153,312

2015 Average Home Price: $161,388

• Nunavut

2014 Average Home Price: *N/A

2015 Average Home Price: *N/A

(*N/A = No Data Available).

To view the average home prices for specific cities in each province, please refer to the above INFOGRAPHIC.

To search for a home, condo or apartment for rent across Canada, start you search at www.RentSeeker.ca or search on-the-go with RentSeeker.ca’s FREE iTunes and Google Play apps!

Let us know YOUR thoughts, comments and feedback on Canada’s Housing & Rental Markets by joining the conversation with The RentSeeker.ca Team on Twitter & Facebook!

Some factors which has led Canada to rank fourth place among the world’s hottest real estate markets include;  the lower Canadian dollar which has increased foreign interest and demand for Canadian real estate.

Coupled with the weaker Canadian dollar, is the Bank of Canada’s keeping of interest rates low, which in-turn has helped fuel the rise in housing costs across the country.

And to top it off, Canada Mortgage and Housing Corporation announced in September 2015 the new CMHC Flexibilities for Affordable Housing – allowing new home owners to use 100% of gross rental income of secondary rental suites when applying for CMHC insured mortgages (*restrictions apply to this new provision so readers should refer to the CMHC website for more detailed information on this new provision).

Many regulators,  economists and investors are watching Canada’s housing market closely with varying views and perspectives on the final outcome. Some are speculating a “crash to come“,  while other well respected real estate investors like Canada’s largest Real Estate Investment Trust’s CEO, Edward Sonshine of RIOCAN,  who feel there is little risk of a correction while the vast majority of property is in responsible hands.

Given all the speculation around the housing market, many financial advisors are trying to provide their best advice for their clients, whether they are renters thinking about purchasing their first home, or current home owners or retirees who might be looking to downsize and wondering if this is the right time to sell and reconsider their financial planning.

The Canadian Real Estate Association (CREA) recently published median home prices for cities across Canada. As expected, cities like Vancouver and Toronto topped the list with the average price for a home in Vancouver coming in at $857,015. And the average price to for a home in Toronto coming in $627,395.

View RentSeeker.ca’s INFOGRAPHIC showing the average income needed to purchase a home in cities across Canada

*RentSeeker.ca will be publishing a full report on this data in the coming month(s):

For our readers benefit, we also include the average rent cost for a 3 bedroom apartment in the cities listed below for cost comparison purposes:

To view the average rents for apartment rentals across Canada, you can view the full RentSeeker.ca data from our recent INFOGRAPHIC – The Average Cost of Renting an Apartment in Cities across Canada.

Here is a snapshot of some preliminary data for 5 cities across Canada showing the current 2015 average home prices compared to 2014, with Year over Year (Y-O-Y) percentage increases.

• Toronto 

2015 –  $627,395

2014 –  $575,676

Y-O-Y increase: 9.4%

Average Rent for a 3 Bedroom Apartment in Toronto  – $1,495 (per month)

• Vancouver

2015 –  $857,015

2014 – $836,735

 Y-O-Y increase:  2.4%

Average Rent for a 3 Bedroom Apartment in Vancouver – $1,369 (per month)

• Ottawa

2015 – $366,145

2014 – $357,753

Y-O-Y increase: 2.3%

Average Rent for a 3 Bedroom Apartment in Ottawa – $1,482 (per month)

• Montreal

2015 – $343,452

2014 – $329,574

Y-O-Y increase: 4.2%

Average Rent for a 3 Bedroom Apartment in Montreal – $920 (per month)

• Winnipeg

2015 –  $274,541

2014 – $263,859

Y-O-Y increase:  4.0%

Average Rent for a 3 Bedroom Apartment in Winnipeg – $1,205 (per month)

Readers can utilize websites like RateHub.ca‘s Mortgage Affordability Calculator to determine the income required,  the estimated mortgage payment, as well shop mortgage rates.

Most of Canada’s “big banks” offer tools for users as well, including:

• CIBC
• TD Canada Trust
• Scotia Bank
• Bank of Montreal 
• Royal Bank of Canada

There are of course other costs to keep in consideration as well when making a decision to purchase a home. Here is a great article from Romana King of MoneySense Magazine providing some great information for consideration.

Follow RentSeeker.ca on Twitter and Facebook to stay up to date on all the latest rental market and housing news across Canada!

RentSeeker.ca, Canada’s leading Apartment and Housing Finder has published the House Price Analysis and Assessment information in an INFOGRAPHIC for readers to be able to view the Housing Price Analysis and Assessment in a snap-shot form for easy reference.

(Click on the INFOGRAPH to Enlarge)

The overall assessment of risk detected by the framework is high for Toronto, Winnipeg and Regina. In Toronto, the high overall risk reflects a combination of price acceleration and overvaluation. The high level of risk in Winnipeg reflects risks of overvaluation and overbuilding, while in Regina it reflects price acceleration, overvaluation and overbuilding, particularly of condominium apartments.

“Nationally, CMHC continues to detect a modest risk of overvaluation. However, our overall assessment of the risk of problematic conditions varies from centre to centre due to regional differences in housing markets. Imbalances in local housing markets could be resolved with further moderation in house prices or improving economic conditions,” said Bob Dugan, CMHC’s Chief Economist.

“In the case of Toronto, strong price acceleration in 2015 reflects a larger share of sales of pricier homes. The rise in house prices have not been matched by growth in personal disposable income, giving rise to a modest risk of overvaluation”.

The risk of problematic market conditions continues to be assessed as moderate for Montréal and Québec due to the detection of some risk of overvaluation.

In Toronto, Ottawa and Montréal, we are monitoring the risk of overbuilding. Condominium units under construction are near historical peaks. Inventory management is therefore necessary to make sure that these condominium units under construction do not remain unsold upon completion.

Low overall housing market risk is observed for Vancouver, as none of the individual risk factors are currently detected.

The results released today include those for the national market as well as 15 Census Metropolitan Areas (CMAs) – Vancouver, Victoria, Calgary, Edmonton, Regina, Saskatoon, Winnipeg, Toronto, Hamilton, Ottawa, Montréal, Québec, Moncton, St. John’s and Halifax (with Victoria, Hamilton and Moncton being added from the previous report released in April).

The centres recently added, Victoria, Hamilton and Moncton are assessed as low overall risk. None of the risk factors are detected in Victoria, while overheating is detected in Hamilton, and overbuilding in Moncton.

The HPAA is a comprehensive framework that is designed to assess housing market conditions by taking into consideration the economic, financial and demographic drivers of housing markets. The use of multiple indicators of housing conditions, which incorporate various data sources and price measures, provides a robust picture of overall housing market conditions.

CMHC’s HPAA framework is designed to detect the presence of problematic conditions in Canadian housing markets. The HPAA framework assesses housing market conditions and considers the incidence, intensity and persistence of four main risk factors:

1. Overheating of demand in the housing market, wherein demand significantly outpaces supply.
2. Acceleration in the growth rate of house prices, which could be partially reflective of speculative activity.
3. Overvaluation in the level house prices which could be partly reflective of speculative activity.
4. Overbuilding of the housing market, which suggests that supply significantly outpaces demand.

For those who feel that given the overall assessment, renting an apartment might be a better option than purchasing a home, RentSeeker.ca offers a database of thousands of apartment listings across Canada.

So our team here at RentSeeker.ca decided to research the pricing on some of the more popular items across both borders and present it the way we know best – in a cool INFOGRAPH!

Check out our research below which includes a snapshot comparison of Home Prices, Autos, Mobile Plans, Retail and Technology Prices between products in Canada and in the U.S.

Share your comments and feedback and connect with us on social media at:

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So RentSeeker.ca and our friends at Blue Chip Mortgage decided to take a look at what it actually costs and how much income you need to actually purchase a home in many cities across Canada.

Check out the results presented here in our INFOGRAPH for the salary you need to purchase a home in cities across Canada:

For more great information about the Canadian Real Estate Market, check our blog: