For many in Toronto, buying a single-family detached home is a pipe dream. With the average price of these properties hovering around $1 million, breaking into the current housing market is a difficult task.
Today, RBC released its quarterly housing trends and affordability report. It details how affordability for detached homes is inching closer to "risky levels" in both Toronto and Vancouver.
"In fact," reads the report, "affordability in Toronto is moving ever closer to the historically poor levels that prevailed in 1990, which may signal that risks are mounting because those were associated with a housing bubble at the time."
RBC calculates affordability by measuring the amount of median pre-tax household income needed to cover mortgage payments, properties taxes and utilities at current market prices. For a detached bungalow in Toronto, this number sits just under 60 percent, meaning nearly two-thirds of a person's income would go towards paying for their house.
For a standard, two-storey detached house, this number jumps to 67.5 percent. As the report notes, however, condos are much more affordable on account of a continued supply (thanks condo boom). The current affordability measure for condos is just over 30 percent -- a number that hasn't changed in the last five years.
Photo by Vic Gedris
by Amy Grief via blogTO