It will take Torontonians who make over $236,000 per year about 25 years to save for a down payment on a house, according to a new housing affordability report. But, the report also notes the real estate market is seeing improvement in affordability.
The National Bank of Canada (NBC) released its housing affordability report for the first quarter of 2023, where it analyzed the condo market, as well as other dwellings and the real estate market as a whole in 10 major cities across Canada.
The federal bank factored how long it takes a median-income household to save up for the cash down payment, which is measured by the number of months needed to save for the minimum payment at a savings rate of 10 per cent of its pre-tax income.
A down payment for a non-condo (detached or semi-detached house) in Toronto is 20 per cent while it’s roughly seven per cent for Hamilton, a spokesperson for NBC confirmed.
The report also looks at the monthly mortgage payment, assuming a 25-year amortization period and a five-year term.
Across the country, the report notes affordability has steadily improved, with the quarter marking the largest improvement in affordability in almost four years.
Vancouver, Toronto, and Hamilton saw the biggest price declines as well as the best improvement in affordability during this quarter. However, Toronto’s mortgage payment as a percentage of income (MPPI) is still way above Canada’s baseline, sitting at just under 83 per cent.