For home buyers early on in their hunt,
at a time of record-high home prices and low interest rates, pinpointing exactly what you can afford and where isn’t exactly clear cut. Today, it takes a six-figure household income to afford a home in most areas of the Greater Toronto Area.
Real Estate Brokerage TheRedPin, have published a study showing that the average household income required to buy a home, anything from a condo apartment to a detached house, is $124,153. This includes the income needed for property taxes and utilities.
This year, Durham has become one of the hot spots in the GTA for new home buyers trying to enter the market, where, if you’re earning a little less than $100,000 a year, you can still find a starter nest.
It’s easy to see why first-time buyers in particular fear being priced out of the market, said Tarik Gidamy, TheRedPin’s Broker of Record.
“Not many people have the chance, especially gen Y and the newer generation, to amass a deposit that would qualify for today’s average home price,” he said.
TheRedPin study assumed an average 20-per-cent down payment, an interest rate of 2.49 per cent and a 25-year amortization. Property taxes were calculated on a per-municipality basis. The study found that purchasers eyeing detached houses, semis or townhomes need 17 per cent more income to buy this year than they did last year as area home prices continue to climb faster than most people’s earnings.
The highest average home prices were in York Region, where King Township homes averaged $1.208 million between January and July, and in Richmond Hill, which showed a $1.066-million average price in the same period.
“The average Canadian who has an average job is getting driven out of those markets completely,” said Gidamy, who added that the area is especially attractive to foreign and move-up buyers, who have equity from a previous home and some additional income.
At the other end of the market, buyers with less than $100,000 in annual income can still afford real estate in Durham Region, including Oshawa and Clarington.
First-time buyers in particular are increasingly attracted to Oshawa, where the average home price is $427,790 year-to-date (TREB).
We have been working hard for our clients to get them to home of their dreams as the trend toward multiple offers has become a regular part of the Oshawa real estate scene, as the average home in Durham has selling for 104% of list price, and in approximately 12 days or less.
In such a hot market, it is still important to remember that buying a home is one of the largest investments you will make, and doing your homework before making the decision to buy is critical. With prices continuing to climb, consider what you can be flexible about, whether that is your willingness to look outside of your desired neighbourhood, size of the home, or renting out part of the home.
Let our Team of professionals help you figure out what you can afford, and what can bring you closer to achieving your real estate goals! Call us at (905)-426-7515 or send us a message http://www.maryroyteam.com/Contact.php