For those in Ontario dreaming of homeownership, the challenges of saving for a home are all too real. Now, a new study has shown that the province ranks dead last in the country after a comprehensive analysis.
The study ranked provinces based on their housing affordability and living costs amongst other factors to arrive at a home saving ranking with Ontario landing at the bottom of the list.
With an average house price of a staggering $931,870, Ontario faces steep housing costs. Coupled with a median annual income of $41,690, prospective homebuyers in the province encounter significant financial barriers. Moreover, Ontario residents contend with high living expenses, particularly in childcare, food, and household maintenance costs.
And it is that much worse in Toronto.
Recently, a report by the National Bank of Canada found that, at a savings rate of 10 per cent of pre-tax income, it would take 297.2 months, or 24.7 years, to save enough for a down payment on a home in Toronto. That’s based off of a median home price of $1,137,570, equalling a down payment of $227,514. However, the qualifying annual income to be able to make those savings is $230,923 — more than double the average household income of $97,000 in Toronto.
Based on the Metro Vancouver Home Source report index, Ontario came out with a rather paltry 20.97 out of 100, making it the hardest province to save for a home.
Where is it easiest to save for a home?
Newfoundland and Labrador emerged as the most favorable province for prospective homebuyers, securing the top spot with an impressive score of 85.16 out of 100. The province boasts the highest median household income of $57,410 and the second-lowest average house prices, averaging $291,806.
In the second position, New Brunswick earned a score of 66.48 out of 100, primarily attributed to its lowest average house price of $289,785. Despite having the lowest median annual income at $38,030, the province offsets this with relatively low living costs.
Prince Edward Island secured third place with a score of 66.37 out of 100. The province’s average house price stands at $388,844, while the median annual income is $39,519. Despite being one of the smallest provinces in terms of population, Prince Edward Island ranks third-highest in private dwellings per capita at 0.49 and has the lowest income taxes at $11,853.
Where else is it hardest to save for a home?
Joining Ontario as another tragically unaffordable province, British Columbia scored 21.61 out of 100 and ranked ninth. The province has the highest average house price at $996,460 in addition to high living costs, with the most expensive public transport, healthcare, and education. However, the state has the lowest mortgage insurance premiums on average.
The study’s findings provide valuable insights into the affordability of homeownership across Canada. For those in Ontario, it’s a reminder of the financial challenges they face in the housing market. Despite the slowing of the market over the last number of months and a slow trickle of home price declines, high mortgage costs thanks to an inflationary economy are not helping.