Single Awareness Day: Buying a Home with a Single Income

Single Awareness Day: Buying a Home with a Single Income

Although dual-income households can improve purchasing power and the ability to qualify for a mortgage, a significant number of home buyers are going through the process solo. But how affordable is it to buy a home on a single income in Canada?  

A study by Zoocasa looks at the most affordable cities for single home buyers across Canada in light of Single Awareness Day on February 15th. Results revealed a sizeable amount of Canadian housing markets ideal for Canadians living on a single income.

Data is collected and analyzed on a basis of average and benchmark home prices sourced from regional real estate boards. A 20% down payment and financing taken with a 3.29% interest rate amortized over 30 years is assumed, determining the minimum income required to qualify for a mortgage on the average home. Findings are then compared to the median income data collected by Statistics Canada on “persons living alone who earned employment income”.

For more information on home affordability for single incomes across Canada, see the infographic included.

Singles More Likely to Afford Homes in Atlantic Canada and Prairies

Single homebuyers located in Eastern Canada and the Prairie provinces will have a greater chance in finding an affordable home.

In particular, Regina ranks first out of 20 cities for affordability with a median single income of $58,828, leaving buyers with a comfortable surplus of $20,025 on the average priced home worth $284,424. Saint John follows closely, where single buyers have a median income of $42,888 and a surplus of $18,038, on an average priced home of $181,576. The housing market in Edmonton also proves to be more affordable, with a median single buyer income of $64,036 and the average home priced at $338,760, leaving a $17,826 surplus in income.

Other single-income friendly cities include MLS listings in Calgary, Lethbridge, Winnipeg, and Halifax.

Popular Markets in BC and the Greater Golden Horseshoe Most Unaffordable

As expected, the most expensive homes for single buyers are located in the provinces with some of Canada’s busiest cities. Homes on the Vancouver MLS are priced at a steep average of $1,019,600 and the single buyer in the area making a median of $50,721 falls almost two times their income short at $88,361. MLS listings in Toronto priced at an average of $748,328 are also out of budget, with the median income for single buyers at $55,221 falling short of $46,858. Victoria ranks third in unaffordability for singles buying homes in Canada, with an average home price of $633,386, making for a $39,359 difference compared to the median income of $86,400.   

Other markets out of affordable range include Guelph, Kitchener-Waterloo, London, Montreal, and Ottawa.  

Gen Xers Hold Purchasing Power Over Millennials

Earnings by age groups per location was also looked at, comparing which demographic had the greatest affordability when it comes to purchasing a home solo. Results showed in every market, Gen Xers (35 – 44 and 45 – 54 age brackets) had the most purchasing power and earnings, with 11 affordable markets in their reach. This puts them a tick above the remaining age groups who have 10 affordable markets based on income. In each city, Boomers (55 – 64 years) fell in the middle for earning power, with Millennials (aged 25 – 34) placing last for affordability.

Here are the five most and least affordable housing markets for single home buyers:

Top 5 Most Affordable Housing Markets for Single Home Buyers

#1 Regina

  • Average home price: $284,44
  • Income required: $38,798
  • Actual median income: $58,823
  • Income surplus: $20,025

#2 Saint John

  • Average home price: $181,576
  • Income required: 24,769
  • Actual median income: $42,888
  • Income surplus: $18,038

#3 Edmonton

  • Average home price: $338,760
  • Income required: $46,210
  • Actual median income: $64,036
  • Income surplus: $17,826

#4 Saskatoon

  • Average home price: $290,736
  • Income required: $39,659
  • Actual median income: $55,758
  • Income surplus: $16,099

#5 St. John’s

  • Average home price: $295,211
  • Income required: $40,270
  • Actual median income: $51,964
  • Income surplus: $11,694

5 Least Affordable Housing Markets for Single Buyers

#1 Vancouver

  • Average home price: $1,019,600
  • Income required: $139,082
  • Actual median income: $50,721
  • Income gap: $88,361

#2 Toronto

  • Average home price: $748,328
  • Income required: $102,079
  • Actual median income: $55,221
  • Income gap: $46,858

#3 Victoria

  • Average home price: $633,386
  • Income required: $86,400
  • Actual median income: $47,041
  • Income gap: $39,359

#4 Abbotsford

  • Average home price: $590,900
  • Income required: $80,604
  • Actual median income: $46,714
  • Income gap: $33,890

#5 Hamilton-Burlington

  • Average home price: $550,058
  • Income required: $75,033
  • Actual median income: $51,253
  • Income gap: $23,778
buying single home income gap Zoocasa

Methodology

Income gap: The income gap is calculated as the difference between the median total income for persons living alone who earned employment income, and the income required to purchase the average home.

Home prices: January 2019 and December 2018 average and benchmark home prices were sourced from regional real estate boards. The most recently available price at the time of research was used.

Income required: The income required to afford the average home price was calculated using the Ratehub mortgage affordability calculator (www.ratehub.ca/mortgage-affordability-calculator) assuming a 20% down payment, a mortgage are of 3.29% and a 30-year amortization. Calculations do not factor in carrying costs such as property taxes and heating.

Median total income of persons living alone by region: The median total income of persons living alone who earned employment income by census metropolitan area or census agglomerations, by age group, was sourced from Statistics Canada, 2016 Census.

Written by Zoocasa. Canada’s top real estate website.

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