Buying a house in Toronto. It’s expensive and to be quite honest, out of reach for many consumers. But, if it’s a goal of yours, you need to be prepared with an understanding of what the average house price is in Toronto.
Backed by data from the Canadian Real Estate Association, here is our easy-to-understand guide to the average cost of a home in Toronto in 2023.
Average House Price In Toronto
The average house price in the Greater Toronto Area is currently $1,119,428 as of September 2023. That’s a 3.0% increase from the same month in 2022 when the average home in the city was $1,086,538.
These prices are extremely high, especially when compared to other cities across the province of Ontario and across the nation as a whole. For comparison purposes, the average price of a home in nearby Cambridge, ON is $741,300. Further north in Thunder Bay, ON, the average home price is $362,562. Clearly, Toronto is the most expensive city in the province of Ontario. Second most expensive in Canada after Vancouver.
Comparing Average Home Prices By City In Ontario
Let’s compare even more home prices in other cities across Ontario to show how much more expensive Toronto is to buy a home in.
|Home Prices 2023||Home Prices 2022||Year-Over-Year % Change|
Average House Price In Toronto Based On Property Type
Depending on whether you’re looking to buy a single detached home, semi-detached home or a condominium townhouse or apartment, the median price will vary. According to the Toronto Regional Real Estate Board, here’s how much you can expect to pay:
- Single Detached Homes – Up 5.2% on a year-over-year basis, the average sale price of single detached homes was $1,440,786 in September 2023.
- Semi-Detached Homes – Up 4.9% on a year-over-year basis, the average sale price of single detached homes was $1,094,074 in September 2023.
- Townhouse – Up 4.5% on a year-over-year basis, the average sale price of single detached homes was $941,695 in September 2023.
- Condominium Apartments – Down 3.3% on a year-over-year basis, the average sale price of single detached homes was $707,065 in September 2023.
How Much House Can You Afford In Toronto?
Before you find your dream home in Toronto or head to the bank to get preapproved for a mortgage, it’s a good idea to understand mortgage affordability. Basically, how large of a mortgage can you afford?
To be prepared, you’ll need to gather some basic information, including:
- Your gross annual household income.
- Monthly debt payments (credit cards, car loans, etc.)
- Estimate of household expenses (utilities, property taxes, home insurance, etc)
- Estimate of mortgage information (purchase price, down payment, interest, etc.)
Keep in mind that if you’re just starting your home-buying journey, the information you’ll plug into a mortgage calculator will be an estimate. But, that is ok. You’ll still get a good idea of the type of mortgage you afford.
How Are Home Prices In Toronto Determined?
When buying a home, it’s important to understand how house prices are determined to ensure you’re not paying more than the house is worth.
In general, home prices are affected by numerous factors including current interest rates, housing availability, and consumer demand. The features, age and condition of the house will also affect the price of the home.
To help you determine the value of a house, check the following:
- Historical Sales – The best way to determine how much a house is worth is by checking sales in the area. Real estate agents can help you figure this out by pulling a list of “comps” — or comparables — to help you find accurate prices of homes in the area.
- Adjustments And Comparisons To Comparable Sales – The more similar the comparable properties are to the subject property, the easier it will be to come up with an accurate home price. This can help you understand what kind of offer you can make to the seller.
How Does The Average House Price In Toronto Compare To The Rest Of Canada?
Clearly, Toronto has some of the highest home prices in Ontario. But how does it compare to the rest of the country?
Right now, the average price of a home in Canada is $655,507, compared to Greater Toronto’s average of $1,127,000. The City of Toronto is one of the reasons why the province-wide average home price is so high, and Ontario’s home prices contribute largely to the high nationwide average home price.
How To Avoid Becoming “House Poor”
When you eventually buy a home, you want to make sure that you still have plenty of money left over after your mortgage payments have been made and you’ve paid all other bills. Otherwise, you run the risk of becoming house poor. which means almost all of your money is going towards covering the cost of homeownership.
To avoid falling into this trap, consider the following.
Save Up For A Big Down Payment
In order to secure a mortgage, you’ll need to put a down payment towards the purchase price of your home. Generally speaking, the minimum down payment amount you can make is 5% of the purchase price of the home. Most lenders prefer to see down payments much higher than 5% since this will lower their risk.
Moreover, the more you put down, the less you’ll need to borrow. This can translate to lower mortgage payments for you, leaving you with more money in your pocket every month.
Before you buy a home, take the time to save up for a sizable down payment amount so you can minimize the amount of money you eventually have to borrow and reduce your monthly costs of homeownership.
Calculate How Much It Actually Costs To Own A Home: Homeownership Costs
There’s a lot more that goes into owning a home than just your mortgage payments. While your mortgage will likely be your biggest debt payment, there are a bunch of other homeownership-related bills that you’ll need to cover and budget for, including property taxes, home insurance, utilities, and maintenance.
Just because your lender approves you for a certain loan amount doesn’t necessarily mean you should take it. Instead, you may be better off applying for a loan amount that’s lower than the maximum amount you’ve been approved for to avoid stretching yourself too thin financially.
How Much Should You Budget For Your Home?
A good rule of thumb to follow is to make sure that your all home costs such as mortgage payments, insurance, heating, condo fees, and utilities do not use up any more than 35% – 39% of your gross income. For instance, if you earn $7,000 a month, then your homeownership costs should be no more than $2,100 a month.
Similarly, your Total Debt Service (TDS) ratio, which is a measure of all your debts to gross income, should not exceed 40% – 47%. Otherwise, you may find it more difficult to get approved for a mortgage. And even if you do get approved, you may find yourself struggling to cover all mortgage and debt payments.
Maintain A Healthy Credit Score
Several factors play a role in your ability to secure a mortgage, and your credit score is one of them. Your credit score can not only affect your ability to get approved for a home loan, but it can also affect the interest rate you qualify for.
Buying a home is a big deal. You’ll be spending a big chunk of change on a home purchase, especially in the city of Toronto where home prices are extremely high relative to the rest of the country. Be sure to take the time to get your finances in order and boost your credit score, and only apply for a mortgage amount that your current budget can comfortably handle.
Home Prices In Toronto FAQs
How much do I need for a down payment?
- For houses that cost $500,000 or less, at least a 5% down payment is required.
- For houses that cost between $500,000 and $999,999, a 10% down payment for the portion of the price above $500,000 is required.
- For houses that cost $1 million or more, a 20% down payment is required.