A new study from Zoocasa has found that the Hamilton-Burlington region is the third-least affordable place to buy a home in Canada — and the 10th-least affordable area in North America.
While home prices around Steeltown have more than doubled in the last decade, the average income has not grown at that same fiery pace, making housing in the region less affordable than in Kitchener-Waterloo, Montreal and Ottawa.
Looking south of the border, the region is also less affordable than large U.S. cities such as Portland, Ore., Dallas, Texas, Chicago, Ill., and Washington, D.C.
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“I’m sure Hamiltonians have either felt the pinch if they’re looking to buy or the excitement with the increase in equity in their homes,” said Carrie Lysenko, chief executive at Zoocasa, who conducted the study.
The Toronto-based real estate firm compared affordability across 40 cities in North America by seeing if a household with a median income for a city could afford the average home in that same place.
In nearly half of the 11 Canadian cities included in the report, the median income wasn’t enough to afford the average home, with Vancouver, B.C., being the least affordable and Saint John, N.B., being the most.
The affordability calculations were based on a 20 per cent down payment and a mortgage at standard rates with a 30-year amortization period, according to the study.
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Looking at Hamilton-Burlington, the study found that a household with an income of $80,000 could afford a home priced up to $452,192 — meanwhile, the average home price for the region was $752,500 in February.
That made for an affordability gap of $300,308, according to the study.
“That’s substantial for people to come up with in terms of a down payment,” said Lysenko. “And in terms of how people are going to fund not only the purchase price of a home, but also how they maintain those payments moving forward.”
The report did not factor in taxes, insurance, utilities and other debts, which could impact how much people can afford.
Lysenko said when it comes to Canada, parts of the Maritimes as well as the Prairies continue to be “much more affordable” areas for homebuyers based on average incomes.
Saint John is the most affordable city to buy a home, according to the study. Household incomes there are relatively low, but a midpoint income can afford a house costing $367,400 — which is a lot more than the median house value of $257,500.
From there, you’d have to head west to Saskatoon. Household incomes and home prices there are a bit higher, but even still, the typical household can afford an average priced home.
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Lysenko noted that while moving across the country can be a way to enter the housing market, the infrastructure of smaller, less-populated provinces “may not be prepared” for an influx of new residents.
“It’s not necessarily as clear as a path as it was maybe twenty or thirty years ago,” she said.
But back in Hamilton, Lysenko said the study reaffirms the need for all levels of government to look at different, more affordable housing types when it comes to future development and creating density.
“There needs to be a reimagining of what of some of the neighbourhoods could look like in the future,” said Lysenko. “This analysis highlights the need for some creative solutions.”
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