Do You Qualify for the Average Home?

June Fixed Rate Forecast

You need a household income of $77,700 to buy the average Canadian home.  Of course there is no average city so you’ll need to earn more or less income depending on where you live. 

Here’s a chart released by the Royal Bank of Canada (RBC) outlining the minimum income needed to qualify for the average house price in select Canadian cities.

City

Average Q1 Price

Qualifying Gross Income

Canada

$366,500

$77,700

Vancouver

$786,300

$147,300

Calgary

$451,800

$89,500

Edmonton

$330,000

$71,900

Toronto

$556,600

$113,300

Ottawa

$389,800

$88,400

Montreal

$294,500

$63,900

 Income is a major component driving housing prices.  The higher the incomes the higher the bids to snag that dream home.   High levels of international appeal will drive prices even higher as foreign investment and migration increase demand.  Of course if there aren’t enough income earners over the qualifying threshold then demand will drop off and prices will adjust accordingly.  The major concern over mortgage rate increases is that as mortgage rates go up, so do minimum qualifying incomes.

Those of us living on the edge of just qualifying for a mortgage will be most impacted.  Most Canadians though have plenty of room based on their qualifying income.  The greatest segment impacted will once again be first time homebuyers.  With small downpayments and newly budding careers this cohort will face the biggest hurdles if mortgage rates leap higher.

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