Using data from the CREA, we’re able to calculate how much income is required to qualify for a mortgage to buy the average house by province. As interest rates continue to rise, the average income necessary to qualify for a mortgage has skyrocketed.
Key Housing Market Statistics (October 2023)
The average home in Canada costs $741,400.
The minimum income required to qualify for the mortgage on the average Canadian home is $195k
Even the top 10% of earners (estimated average income of $175k) in Canada do NOT qualify for a mortgage to purchase the AVERAGE Canadian home.
Since May, the minimum income to qualify for a mortgage on the average Canadian home has risen by $15,000
Despite average house prices falling by $13,300 since May (due to large populations in ON and QC), rising interest rates mean that qualifying for a mortgage today is much harder than in May.
House prices have fallen since May in Ontario and Quebec. All other provinces have seen the average house price INCREASE since May.
Despite data showing national average prices falling, this remains highly regional, with massively different experiences by province and city.
Affordable Housing Stats: How Much Income Do You Need to Afford a Home?
We’re using the latest housing data, and we assume an interest rate of 6.50% and a stress test rate of 8.50%. We also estimate heating costs of $150 per month and $4000 per year in property taxes. For this calculation, the data is based on a 20% down payment and 25-years amortization. We first did this analysis in May 2023, and we compare the changes since then. Below, we look at the income required to qualify for these mortgages, not to pay them.
| Province | Average home price | Mortgage amount | Income required | Change in Income required (vs May 2023) |
|---|---|---|---|---|
| Ontario | $896,500 | $717,200 | $234,691 | +$18,564 (+8.59%) |
| British Columbia | $988,300 | $790,640 | $256,867 | +$29,302 (+12.88%) |
| Quebec | $468,900 | $375,120 | $131,396 | +$12,951 (+10.93%) |
| Manitoba | $342,800 | $274,240 | $100,935 | +$7,982 (+8.59%) |
| Saskatchewan | $328,000 | $262,400 | $97,359 | +$8,506 (+9.57%) |
| Alberta | $484,900 | $387,920 | $135,261 | +$15,228 (+12.69%) |
| Nova Scotia | $398,000 | $318,400 | $114,269 | +$10,201 (+9.80%) |
| Newfoundland and Labrador | $295,400 | $236,320 | $89,484 | +$11,188 (+14.29%) |
| Prince Edward Island | $365,200 | $292,160 | $106,346 | +$11,354 (+11.95%) |
| New Brunswick | $292,600 | $234,080 | $88,808 | +$10,704 (+13.71%) |
Increasing mortgage rates are being felt most strong on the Eastern provinces, because home prices haven’t fallen by as much as in provinces like Ontario.
In fact, in British Columbia, PEI, Newfoundland, New Brunswick, Nova Scotia and Manitoba, Saskatchewan and Alberta, prices have increased since May.
Only in Ontario and Quebec has the average house prices reduced compared to May.
Those in British Columbia and Ontario still require the highest income to qualify for the average house in those provinces. This is driven by the massively higher valuations in these provinces compared to the median.
Housing Costs vs Income for Major Cities
| Province | Average home price | Mortgage amount | Income required | Change in Income required (vs May 2023) |
|---|---|---|---|---|
| Vancouver | $1,203,300 | $962,640 | $308,804 | +$35,747 (+13.09%) |
| Toronto | $1,127,000 | $901,600 | $290,372 | +$22,380 (+8.35%) |
| Montreal | $518,600 | $414,880 | $143,402 | +$14,206 (+11.00%) |
| Calgary | $553,300 | $442,640 | $151,785 | +$17,631 (+13.14%) |
| Edmonton | $373,400 | $298,720 | $108,327 | +$10,353 (+10.57%) |
| Ottawa | $643,600 | $516,320 | $156,621 | +$2,597 (+1.7%) |
| Victoria | $878,600 | $514,880 | $173,598 | +$16,977 (+10.84%) |
| Winnipeg | $342,800 | $274,240 | $100,935 | +$7,982 (+8.59%) |
| Hamilton | $854,200 | $683,360 | $224,472 | +$18,131 (+8.79%) |
| Halifax | $522,900 | $418,320 | $144,441 | +$12,690 (+9.63%) |
| Barrie | $809,400 | $647,520 | $213,650 | +$19,284 (+9.92%) |
Among cities we see a similar picture, but with less variance. Toronto and Calgary come out with the highest increase in income required, despite Ontario seeing a much lower increase. Partly this can be explained by Ottawa, where the income required to qualify increased by only 1.7%, a tiny fraction of what we’ve seen across the rest of the country.
With some exceptions, broadly we’re seeing decreased home values in these cities, despite many of them being located in provinces where the average value has increased since May. This is likely due to decreased sales volume in these cities.
Since the average value of a property in a city is lower than outside of the cities, due to most city sales being condos rather than homes, if the sales volume in cities decreases more than their province then the province average valuation will be driven more heavily by the rural sales.
Composite data like this is typically used and this is why despite cities being home to much of the population, their prices can fall and yet the composite province price can increase. Keep the fact that relative sales volume can impact the data in mind when viewing these statistics from CREA.
