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How Affordable is Toronto?

Mar 31 2017
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According to the Royal Bank of Canada’s affordability data, Toronto and the GTA market is in the “high-risk” zone. Although most of the affordability stress is concentrated in the single-detached segment, the recent demand in condo prices tells us that stress will rise significantly in this segment.

There are many indicators which point Toronto’s housing market in the stressed direction, housing affordability measure which is the proportion of the median pre tax income needed, property taxes and utility bills all put Toronto at its most stressed since 1990.

Based on a down payment of 25 per cent and a 25 year, five year fixed mortgage rate, the level of 64.6 per cent in the forth quarter is the worst since the mid 1980’s. According to RBC’s financiers if left unchecked, the situation will get worse which would inevitably put Canada’s largest housing market at high risk.

 

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