Cost to own a Toronto home soars to over 200% above average household income

It's no surprise that living in Toronto has gotten more and more expensive. But now, the average price of a home in the city exceeds how much people make by a shocking amount.

According to a new report from RATESDOTCA released Thursday, the average Toronto home price surpasses the average median household income by 210 per cent.

The average home in Toronto costs a staggering $1,163,700, according to the MLS. This is $778,7000, or 210 per cent, more than what a typical household can manage with a median average income of $93,006, the report says.

Besides how expensive prices are, another factor that home buyers have to worry about is how much insurance they will receive as mortgage insurers won't insure a home over $1 million.

This leads to increased interest rates and the required down payment.

In Toronto, the home price factored into the uninsured mortgage will be 162 per cent more than what the average household can afford, according to the report.

Breaking into the housing market in Toronto can be extremely difficult. Especially after a recent report from the Canadian government showed a ghastly 56.7 per cent of Toronto condos built from 2016 to 2021, adding up to 37,580 units, are owned by investors.

Across Canada, just like Toronto, the average income also sits incredibly below the average price of a home as the cost sits 141 per cent more than what the average household can afford.

"High inflation and diminished purchasing power, combined with high home prices and borrowing costs, have left many Canadians wondering if the dream of homeownership will ever be within their reach," the report said. 

Vancouver is seemingly the most unaffordable with the average home price 249 per cent more than what the average household can afford.

Factors including population growth, increased income and low interest rates had drawn many professionals to major cities in Canada including Toronto, according to Aled ab Iorwerth, deputy chief economist at the CMHC.

"But now, as demand is going up, these cities are quite slow in increasing their housing supply," said ab Iorweth.

To help the market, ab Iorweth is asking for an "all-hands on-deck approach" from all governments and private parties.