Canada Housing Market

A recent study by Zoocasa highlights a growing disparity in housing affordability, with Toronto emerging as significantly less affordable compared to major U.S. cities like Miami and New York. This comprehensive analysis underscores the affordability crisis facing Toronto residents, driven by lower median incomes and higher home prices relative to these metropolitan hubs in the United States.

Cost of living is on the rise across North America with median incomes increasing at a slower rate. Photo: Zoocasa.

Economic Disparities and Housing Costs

In 2021, the U.S. median household income stood at USD $75,149, substantially higher than Canada’s median of USD $54,074 (CAD $73,000). This income disparity is starkly reflected in the housing market; in 2022, Canadian homes were on average $30,000 more expensive than those in the U.S., despite a $20,000 lower median income in Canada.

Assessing Affordability Across 40 North American Cities

Zoocasa’s report analyzed median home prices, incomes, and maximum affordability in 40 North American cities. It found that even high-cost U.S. cities like New York City and Miami are more affordable than Toronto. Notably, San Francisco exhibited the largest affordability gap, yet it also boasted the highest median income, allowing its residents somewhat better purchasing power. In comparison, median-income households in San Francisco can afford homes around $612,162, nearly double what those in Vancouver and Toronto can manage.

Housing affordability in major U.S. and Canadian cities. Photo: Zoocasa.

Toronto’s Market in Perspective

Toronto’s real estate market starkly contrasts with cities like Dallas, where the median incomes are similar. The median home price in Toronto is a daunting $718,519 compared to Dallas’s $393,650. This difference underscores a severe affordability gap in Toronto, which dwarfs those in many U.S. cities.

Figures based on January 2024 home prices, a 20% down payment, and a 30-year mortgage at a fixed rate of 6.79% (or 4.79% for Canadian borrowers. Photo: Zoocasa.

A Silver Lining in Canada

Despite these challenges, not all Canadian cities mirror Toronto’s bleak housing affordability. Calgary, Winnipeg, Edmonton, Saskatoon, and Saint John offer homes within reach for median-income earners, marking them as pockets of affordability within the national landscape.

The Zoocasa report not only illustrates the challenges within Toronto’s housing market but also highlights broader trends across North America. It serves as a vital resource for potential homebuyers, emphasizing the need to consider both local and international markets when searching for affordable housing solutions. For Toronto residents grappling with high costs, looking beyond the borders could potentially uncover more viable financial opportunities.

Source: How Much More Affordable is Housing in the US Compared to Canada? | Zoocasa Blog