How Much You Need To Earn To Afford A Home In Toronto

You’ll need around $90K in household income just for a condo.

Can't afford a Toronto home? Move out. Picture here: Streetscape in The Orchard in Burlington (Appleby Line near Dundas) showing wide-shallow houses on 36-foot by (typically) 85-foot lots. (Photo by Elvira Cordileone/Toronto Star via Getty Images)

A household would need to earn $144,413 a year to buy an average home in Burlington west of Toronto. (Photo, Elvira Cordileone/Toronto Star via Getty Images)

Looking at the Toronto housing market through an analytical lens of percentages, shifting sales numbers and interest rates may be the go-to method for industry insiders, but for many run-of-the-mill buyers, there’s really one thing that matters: “What can I afford?”

To help answer that question, let’s calculate what level of salary you or your household are going to need to make in order to purchase a home, based on average prices in 2017 so far.

First, we looked at prices for the entire Greater Toronto Area (both the 416 and suburban 905) by property type.


There’s no debating the numbers are overwhelming. But it’s important to note, the salaries represent entire household incomes and not just that of a single person.

Along with providing a broad overview of the region’s market, we also dug up numbers on a per-city basis, looking into prices for all property types (pooling together detached houses, semis and condos).

SalaryGraphicByCityHow the numbers were calculated
If you’ve secured a pre-approval before, it’s likely a mortgage professional has already put your finances to the test using the GDS Ratio. Short for Gross Debt Service Ratio, this calculation adds up all your expenses (mortgage payments, utilities and taxes) and divides that number by your entire household salary.

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If your GDS works out to be 32 per cent (or anything below) a property officially falls in your price range.

We did a reverse calculation and applied the 32 per cent rule to average home prices in the first seven months of 2017 in order to identify the salary you need to buy an average home.

The study factored in a down payment of 20 per cent, which is more reflective of repeat buyers who’ve already built up equity from a previous property and first-timers who likely got some financial support from their parents. A five-year fixed mortgage rate of 2.99 per cent was used.

Remember, the buying journey is different for everyone.

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It’s important to note, this study is meant to provide a broad look into the market and factored in average sold prices. There are still plenty of properties out in the market that sell for below the market average, and in some rare cases, for ludicrously less.

Simply put, there are generally options out there for a variety of home buyers and incomes. Just be prepared to make some compromises if you expect to keep to your budget. Read more about the study at TheRedPin.