Many of the largest cities in the United States, including New York City, have more affordable housing than Toronto or Vancouver, a new report has found.
Despite similar challenges on both sides of the border, Canadian buyers have been particularly impacted because of smaller median incomes, the report found.
The median U.S. household income in 2021 was US$75,149. In Canada the average was CA$73,000, which appears comparable until the exchange rate is taken into account. In U.S. dollars, the average Canadian income would be only $54,074.
Despite earning $20,000 less dollar for dollar, Canadians can expect to pay at least $30,000 more for a home.
Zoocasa analyzed average home prices, median incomes, and maximum affordability in 40 cities across North America. What it found was that a number of Canadian cities ranked high on the unaffordability list.
Vancouver was No. 3 on the North American list, but took top spot as Canada’s most expensive real estate market. Despite being listed as less expensive than San Francisco and San Diego, Vancouver had a much lower median income than either of the California cities.
“Median-income households in San Francisco can afford a home of around $612,162, by far the highest on our list and nearly double what median-income households can afford in Vancouver and Toronto,” the report notes.
“Vancouver has the third-largest gap between max affordability and median home price just behind San Diego. With a median income less than half of that in San Francisco, households in Vancouver can afford a home costing around $332,863—a whopping $543,656 below the benchmark price.”
Toronto has a median income comparable to that of Dallas, Texas, but that is where the similarity ends. The median home price in Toronto is $718,519 whereas Dallas homebuyers can expect to spend $393,650.
Households earning an average income in Toronto can afford a $355,892 home, which is $362,627 less than the median price, the report points out.
The unaffordability trend is not exclusive to Toronto’s housing market, however. Kitchener-Waterloo, located an hour and a half west of Toronto, is in the same boat.
Zoocasa compared Kitchener-Waterloo to Texan city Houston because their median incomes at $60,000 and $60,440 respectively are almost identical. Houston by far is the more affordable city in which to house hunt, however.
“In Houston, median-income households can afford a home costing around $270,681, a mere $59,005 below the median home price of $329,686,” the report reads.
“Despite median-income households in Kitchener-Waterloo being able to afford more expensive homes than their counterparts in Houston, they still face a substantial gap of $200,033 between their maximum affordability and the median home price, which is at $539,176.”
Hamilton-Burlington and Ottawa in Ontario, Montreal, and Halifax-Dartmouth also made the list of Canadian cities where median income earners didn’t make enough to afford an average-priced home.
It wasn’t all bad news for Canada, however. The report found that average income earners in Calgary, Winnipeg, Edmonton, Saskatoon, and Saint John can all afford the current median home price in their cities.
