A house is an asset that will likely be the most valuable — and expensive in your life. Buying a home is a huge financial undertaking and one that requires sound financial discipline and a sizable down payment. If you’ve got your sights set on buying a home in Ontario, you’d be well-advised to do a little homework to find out what the average house price is in Ontario.
Some of the more expensive real estate markets in Canada are located in Ontario, with Toronto being one of the highest. Let’s take a closer look at where home prices currently are in Ontario to help you make a more informed purchasing decision when buying a home.
What Is The Average House Price In Ontario?
In Ontario, the average price for a home is currently $833,525 as of November 2023. That’s a 0.6% increase from the same month last year.
Despite the province-wide average, the price for homes in different cities across Ontario will vary. The following are some of the most expensive areas in Ontario, along with their average house prices:
- Oakville-Milton*: $1,223,500
- York Region: $1,272,914
- Greater Toronto*: $1,067,200
- Hamilton-Burlington: $804,000
- Ottawa*: $623,900
- Kingston and area*: $544,500
Comparing The Average House Price In Ontario To Canada
| Home Prices 2024 | Year-Over-Year % Change | |
| Canada | $646,134 | 2.0% |
| Ontario | $833,525 | 0.6% |
| Prince Edward Island | $361,800 | 3.6% |
| Newfoundland and Labrador* | $291,300 | 4.0% |
| British Columbia | $964,371 | 6.6% |
| Alberta | $446,919 | 5.9% |
| Saskatchewan* | $324,400 | 1.9% |
| Manitoba | $328,654 | -0.7% |
| Quebec | $485,407 | 3.9% |
| New Brunswick* | $287,900 | 7.1% |
| Nova Scotia* | $390,000 | 5.8% |
*based on MLS HPI benchmark prices
Why Is The Average House Price In Ontario So High?
Ontario is home to some of the busiest real estate markets in the country, including the likes of Toronto and the surrounding GTA. Toronto is the largest city in Canada and is a global leader in business, technology, and finance. As such, it’s home to plenty of employment opportunities.
Toronto is also one of the most multicultural cities in the world, with a large population of immigrants. Considering the opportunities that exist in and around Toronto, as well as the growth of population, Toronto is in high demand.
Other cities around southern Ontario are also very busy and growing rapidly, which all contribute to the demand for housing in Ontario and a high average price for homes in busy centres like Toronto and others like it.
While more remote parts of the province may not command home prices nearly as high as the GTA, southern Ontario city home prices play a key role in pushing up the average price for homes in the province.
Do Mortgage Interest Rates Affect House Prices?
Mortgage interest rates can have a huge impact on buyer demand. When mortgage rates are very low, home loans are much more affordable to take out. Low rates incentivize buyers to come out of the woodwork and get into the real estate market to take advantage of these savings. That means more people are looking to buy, which can help boost home prices.
On the other hand, when rates skyrocket, mortgage affordability plummets, which can decrease demand and ultimately keep home prices lower.
What Other Factors Affect The Average House Price In Ontario?
As mentioned, one of the biggest factors that affect the average house price in Ontario is the demand. This demand among prospective buyers is influenced by several factors, including the following:
The Temperature Of The Market
Is it currently a ‘buyer’s market’ or ‘seller’s market’ in the city you plan to buy in? The answer to this question will impact what the going price for homes currently is. In a buyer’s market, the demand for homes is not as strong, as there are usually more homes available for sale than buyers looking to make a purchase. In this case, the price for homes would be lower.
On the other hand, a seller’s market is characterized by few homes available for sale compared to the number of buyers looking, which would drive demand up among buyers and simultaneously increase home prices.
Economy
When the economy is strong and people have more job security and earn better wages, there is usually stronger consumer sentiment. People generally will have more money to spend, including on real estate.
In this case, there may be more demand for housing and a stronger ability to afford homes, which can help keep home prices up. But amid a weak economy and higher unemployment, buying power is not as strong, which can reduce demand and thus keep home prices from increasing.
Location
A desirable location will increase the value of a home. For example, the same home would command a higher price if it’s located on a quiet cul de sac with proximity to the downtown core compared to if it was located on a busy street in a high-crime neighbourhood.
Age And Condition Of The Home
Generally speaking, an older home that’s in poor condition and is filled with outdated materials will be valued lower than a newer home with more modern finishes. Not only is a newer property more aesthetically appealing, but it’s also less likely to require repairs, influencing its value and the price that sellers can list.
Features
Certain features are considered more desirable than others, and as such, they bring the value of the home up. For instance, features like hardwood flooring, natural stone countertops, or stainless steel appliances are considered attractive to most buyers.
Size
A larger home is generally valued higher than a home that is short on square footage. Of course, there are some exceptions. But in general, the fact that more land and materials are needed to construct a larger home will likely translate into a higher price compared to a much smaller property.
How Much Should You Spend On A Home In Ontario?
For the vast majority of Canadians, determining a budget for a home purchase is crucial to avoid wasting time looking at homes that fall outside their financial ability.
Here are a few things to consider to help you determine how much you can comfortably afford in a home purchase.
Make A Detailed List Of All Expenses
Do you have a firm grasp on your expenses every month? Sure, you might have a good idea of how much you pay for the heating bill or your cell phone bill, but have you taken into account all expenses that go out each month? Consider the following expenses:
- Utilities
- Car loans
- Student loans
- Credit card bills
- Groceries
- Entertainment
- Gas
- Car insurance
- Personal loans
- Subscriptions
- Miscellaneous expenses
Make sure to calculate exactly how much you spend every month and compare it to your income. That way you’ll have a clear idea of how much money you have left, which will also tell you roughly how much of your income you can dedicate to a mortgage.
Determine Your GDS And TDS
Your ‘GDS’ and ‘TDS’ are very important ratios to consider when it comes to how much of your income can be put toward mortgage payments. Lenders look at these numbers before approving borrowers for specific loan amounts.
Gross Debt Service (GDS) Ratio
Your GDS is a measure of your housing debt — including the principal, interest, taxes, and half of your condo fees, if applicable — that you would be paying in comparison to your income. This ratio should be no more than 30% to 39%, or your lender may consider it too risky to lend you the amount you requested.
Total Debt Service (TDS) Ratio
Your TDS is a measure of all of your debt — including housing debt — that you would be paying relative to your income. This ratio should be no more than 42% – 44%, otherwise, you may not be approved for the loan amount you’re applying for.
Based on your GDS and TDS, your lender will determine how much of a loan amount you can get approved for. With this figure in mind, you’ll have a better idea of the price range you should stick to when searching for a home to buy in Ontario.
Calculate The Costs Of Owning A Home
There are plenty of bills that come with owning a home, which you should account for before you make an offer on a property. The following are some of the more common expenses that come with owning a home:
Property Taxes
Your property tax rate will depend on where your home is located and its value. Each jurisdiction in Ontario has its property tax rate, which is multiplied by your home’s value to give you the fee you’ll have to pay every year.
In Toronto, for example, the current property tax rate for a residential home is 0.666274%. So, if your home is worth $500,000, for instance, your annual property taxes would be $3,331.37.
Home Insurance
Lenders require a home to be insured for you to be able to take out a mortgage on your home.
Utilities
Heating and cooling, electricity, gas, water, and cable are just some of the utilities that you’ll be paying every month to keep your home operational and comfortable. Similarly, hot water tanks and certain air conditioners are rentals and require monthly payments.
Maintenance And Repairs
Things can start to break down after some wear and tear, which costs money to repair.
Condo Fees
If you live in a condo, you’ll have the added expense of monthly condo fees, though these fees will cover some of the other expenses that you would otherwise have to pay if you owned a freehold home.
Final Thoughts
Ontario is one of the more expensive provinces in Canada to buy a home, especially in busy centres like Toronto. No matter which city you plan to buy in, be sure to take the time to assess your finances, save up for a down payment, and do your due diligence when it comes to purchasing a home that you can comfortably afford.
Frequently Asked Questions
What is the average cost of a house in Ontario?
How large of a down payment do I need to pay for a house in Ontario?
- For houses that cost less than $500,000, a minimum 5% down payment is required.
- For houses that cost between $500,000 and $999,999, a minimum 5% down payment is required for the first $500,000 and 10% for the amount above $500,000.
- For houses that cost $1 million or more, a minimum of 20% down payment is required.
