This is how much you should be making to buy a house in the GTA
Property prices in the GTA have steadily risen and continue to grow at the rate of 2.4% year on year. With an average detached house priced at over $1.25 million and a condo priced at over half a million; to buy a house in the GTA requires a strong financial inflow.
In this blog we will consider various areas in GTA which have least and most affordable home buying options, thus determining affordability for a home buyer in the GTA. But let us first understand the factors that affect the affordability of property purchase.
- Down Payment: Average home price in GTA ranges between $500,000 and $1,500,000. With a 20% down payment norm expected at the time of property purchase, even in the most affordable neighborhoods of GTA, a home buyer would have to raise $160,000. This means that individuals or families with annual income of $40,000 could take more than 10 years to save up for the down payment.
- Mortgage Payment: Presently in the GTA market, a 5 year fixed mortgage rate of 3.3% is a norm. While purchasing a property worth $1,000,000, a typical buyer will raise a mortgage of about $800,000 with a 25 year amortization. This would mean that annual mortgage payments can surmount to about $30,000. At this rate, for a family with annual income below $100,000, affording a home in GTA can prove to be very difficult.
- Property Tax: Although this cost is often overlooked, it can also amount to an additional annual cost of around $7000 for home owners in GTA. This may not directly affect the affordability at the time of purchase, but definitely affects the cost of maintaining property in GTA.
Based on these criteria for affordability, GTA neighborhoods can thus be categorized into the following-
- For buyers with annual income between $80,000 and $100,000
Neighborhoods like Oshawa, Essa, Carlington, Brock, Orangeville and Georgina have houses available at less than $600,000, thus making them the most affordable areas in GTA for home buyers wishing to buy a house.
- For buyers with annual income between $100,000 and $150,000
GTA areas like Toronto east, Toronto West, Brampton, Milton, Halton Hills, Innisfil, Ajax, Aurora and Vaughan are among the many that have houses available in the range of $600,000 and $1,000,000. Individuals or families with annual income above $100,000 can only hope to maintain a house in these areas.
- For buyers with annual income above $150,000
King, Oakville, Richmond Hill, Markham and Toronto Central are clearly the least affordable neighborhoods in the GTA with average housing prices above $1,000,000.
At Toronto Condo Only, we are passionate about new land developments and since 2007, we have helped clients get the best deals and the properties. Monty Malhi has and continues to build formidable relationships with reputable developers and major industry players to give clients first access to the most desirable and sought after projects in and around the GTA. First access to securing units at most projects can amount to considerable price savings of over $20,000 – $50,000. Clients trust our industry knowledge of the real estate investment market throughout Greater Toronto, which is the foundation of our success to buy low and sell high. With our broad vision and innate ability to understand real estate properties, including pre-construction low-rise and high-rise condos, resale homes and commercial properties, we have achieved continued success for our clients and ourselves.
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