If you're keeping an eye on the Ontario housing market , you're probably wondering whether house prices will drop in 2023.
But is the average salary of most Ontario workers enough to afford homes in the present day? A closer look into the market through a new report by brokerage firm Zoocasa reveals that home ownership is out of reach for people in most Ontario cities.
In fact, in Toronto, the average-priced home currently sits at almost $1.1 million , and you would need to make at least $168,000 per year to afford it.
Unfortunately, the median household income for Toronto residents is only $96,700.
But it's not just Toronto that's facing these challenges. Other Ontario cities, such as Niagara, Hamilton-Burlington, Kitchener-Waterloo, Kawartha Lakes, and Barrie, also have median household incomes that are less than what's required to purchase a home.
However, there are still some Ontario cities where owning a home is generally more affordable.
A chart comparing average home prices, income required for a home purchase and median household income by city. Zoocasa
For example, in Ottawa, the median income of $121,790 is more than enough to purchase an average-priced home at $613,000. And in London St. Thomas, the average home costs $583,500, and the median income is $94,070.
It has also been projected that Ontario's housing market will continue to see the biggest correction of all Canadian provinces.
It is estimated that housing prices in Ontario , especially in smaller towns, could plummet by up to 50% by the end of the year, while prices in the Greater Toronto Area (GTA) will only likely drop by around 20%.
Bancroft, Northumberland Hills, Woodstock-Ingersoll, Grey Bruce Owen Sound, Muskoka and Haliburton are the five Ontario towns where housing prices are expected to drop the most, according to a different report by Desjardins.
Durham, London, Windsor, Guelph, Peterborough, Barrie, Orillia, Kitchener, and Niagara Falls are also among the areas where prices are expected to fall by around 30 to 38% by the end of the year.
Zoocasa's report recommends the Prairies and Canada's East Coast as some of the most wallet-friendly options for homeowners.
The median income in Regina sits at $106,340, way above the required income of $47,963 to purchase a house at the average price of $310,200.
Meanwhile, Saskatoon offers similar affordability, with an average home price of $372,400, requiring an income of $57,563 to buy.
On the East Coast, Saint John's average home price of $268,400 demands an income of $41,513, but the median income is more than double that at $89,750.
In Newfoundland and Labrador, a median income of $85,800 is enough to comfortably afford the average home price of $276,700, where an income of only $42,788 is required.
So, if you're looking to invest in a property and want to stretch your budget, these areas might be worth checking out.