Which Ontario Cities Are Affordable On An Average Income?

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Housing affordability continues to be a pressing issue in Ontario, with rising costs and limited options affecting residents across income levels. While the province’s real estate market shows no signs of slowing down, there are pockets of affordability that defy the norm. As average household incomes struggle to keep up with soaring property prices, the question arises: Which Ontario city offers the best bang for your buck?

Affordability in Ontario’s Real Estate Market

When it comes to buying a home in Ontario, the numbers paint a less-than-rosy picture. Out of a whopping 245 local housing markets, only a mere 19 fall within the category of ‘affordable’ for those earning an average income. So, what does ‘affordable’ mean in this context? The measure for affordability in this analysis considers several factors. A prospective homebuyer would need to put down a 20% down payment on their future home. Additionally, the mortgage rate assumed for this exercise is 5.24% as of a date in July. The amortization period, or the length of time you’ll be paying off the mortgage, is set at 25 years. One more stipulation is that no household should be putting more than 25% of their pre-tax income towards mortgage payments.

Why Does 25% Matter

But why does this 25% matter? This ratio is significant because it serves as a barometer for financial health. When mortgage payments exceed this portion of income, households might find it increasingly tough to manage other expenses, such as utilities, food, transportation, and leisure activities, let alone any unexpected costs that may arise. Given these conditions, it’s evident that the housing market in Ontario largely remains inaccessible to the average-income homebuyer.

Average Income

The term’ average income’ itself merits some clarification. According to data, the average household income in Ontario is around $100,000. Yet, despite what might seem like a robust household income on paper, the reality is quite different. Given the stringent conditions set forth for what constitutes ‘affordable housing,’ even those earning an average income might find their options severely limited.

The Effects of The Squeeze

It’s worth noting that this squeeze isn’t felt uniformly across the province. In some areas, the conditions are more forgiving than in others. Yet, even in the so-called ‘affordable’ markets, affordability is relative. What may be accessible for one household might be out of reach for another, dependent on a range of factors, including existing debt, the size of the down payment, and even fluctuating mortgage rates.

Specific Markets with Unique Opportunities

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Bells Corners, Ottawa

In Ottawa’s real estate market, Bells Corners distinguishes itself by offering a balance between income needs and property costs. This region is a valid choice for households with an annual income near $125,000, which is just above the Ontario average by approximately $25,000. With a median home price of $499,950, the area provides an option for those seeking to invest in homes for sale Ottawa without stretching their finances too much. Expected monthly costs for owning a home here include mortgage payments, based on a 20% down payment, as well as additional costs such as home insurance, utilities, and property taxes. These expenses collectively come up to $2,841 per month, making Bells Corners a consideration for those with incomes a bit higher than the provincial average.

North Bay

Among the limited range of housing markets that offer affordability in Ontario, North Bay commands special attention. This city is distinctive because it is the only one among the 19 markets classified as affordable that can genuinely be called a city, boasting a population of around 50,000 residents. Nestled along the northeastern shore of Lake Nipissing, the third-largest lake in Ontario, North Bay provides not just affordability but also a specific lifestyle. With a median home price of $401,950, it serves as a practical option for potential homebuyers who are content to live a considerable distance from metropolitan areas like Toronto, which is approximately a four-hour drive away.

The balance between natural beauty and urban amenities adds to North Bay’s appeal, and all of these elements combined make it a standout option for those hunting for affordable homes in Ontario.

Deep River

Deep River is another area that deserves discussion when it comes to affordability in Ontario’s complex real estate market. This locality offers something that is increasingly rare: homes that are within reach for households earning around $75,000 per year. Deep River’s situation along the Ottawa River in Renfrew County lends it a scenic backdrop, but it’s the financial accessibility that truly makes it remarkable.

Given that most local markets in Ontario are far from affordable for average-income households, the existence of an area like Deep River can’t be overlooked. It provides a chance for those households bringing in less than the provincial average to still achieve the dream—or at least the possibility—of homeownership.

Final Thoughts

In light of the varying affordability scenarios across Ontario’s housing market, potential homebuyers must conduct thorough research and consider multiple factors before making a decision. These considerations go beyond just home prices and income levels, extending to lifestyle preferences and long-term financial planning. The choice of where to buy a home is far from simple and should be approached with care and diligence.

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