‘Never been a harder time’: Here’s the income you need to buy a home in Canada

Despite home prices lowering across much of the country, Canadians will still need to earn more to be able to buy a home than before, according to a new report from RateHub.

Despite home prices lowering across the much of country, Canadians will still need to earn more to be able to buy a home than compared to last year, according to a new report from RateHub.

The report shows that homebuyers will need an annual income of $217,000 in Toronto as of March 2023 to afford to buy a $1,118,500 home. That’s a $6,250 increase in income compared to March 2022, even though the average home price fell by more than $200,000 in the city in that time, according to RateHub.

You will also need to earn over $200,000 in Vancouver to afford a home, while the rest of the country requires between $75,000 and $170,000.

RateHub co-CEO James Laird told Global News that Canadians now need to earn more to buy a home because interest rates have increased to over five per cent from closer to three per cent last year.

“There’s never been a harder time to purchase a home in Canada,” he said.

Laird said that unless the homebuyer is an extremely high earner, they will need a partner to qualify for the average home in Canada. An increased stress test rate of 7.54 per cent has also contributed to needing more income, the report says.

The report found that for nine of 10 cities in Canada, homebuyers need to earn between $5,650 and $21,360 more in annual income to afford a home than they did last year, a trend that is expected to worsen.

“With supply of new listings tight and some home buyers returning to the market, don’t expect home affordability to improve in the coming months,” Laird said.