Although the hot market real estate market has slightly “cooled off” in some areas, Torontonians are still faced with the problem of declining housing affordability. Today’s price of an average two-story detached home eats up 63% of the median pre-tax household income. Who can afford that?
On the other hand, condos remain to be relatively affordable with carrying costs (mortgage, utilities and taxes) equaling about 35% of median income. In a report released by RBC, “the average carrying costs of a single detached home are well above the historic rule of thumb that housing costs should eat up no more than about 32% of the household income. “
What makes the affordability issue particularly concerning for GTA homeowners says RBC Economist Robert Hogue, is that interest rates are likely to start increasing early next year.
Based on the above concerns, it seems that Toronto buyers, especially first time home buyers, will have to adjust to a new normal if they would like to into the market. The most affordable type of housing there is right now would be condos & coupled with the recent spikes in the price of gas, a mind shift is in order if people want to own a piece of Canada that they can call home…