Is affordable housing in Toronto really just a myth? Rate hikes were supposed to crash house prices and allow Millennials and Gen Z to reenter the market. While house prices did come down slightly, high mortgage rates have made payments unaffordable for most. With rate cuts on the horizon, what does the future hold for Toronto’s housing market? Let’s dive into the reality of Toronto real estate and uncover the hidden gems that could make homeownership possible for young families.
The Reality of Toronto’s Housing Market
Toronto’s real estate market is among the most expensive in Canada, if not North America. High demand, limited supply, and high living costs make it challenging for most young families to thrive in this growing city.
The National Bank recently conducted a study on housing affordability in Canada, highlighting some startling statistics for Toronto:
- Average House Price: Just over $1.2 million.
- Average Condo Price: Just over $700,000.
- Mortgage Payment as a Percentage of Income: 84.4% for houses and 50% for condos.
- Household Income Needed: $248,000 for houses and $170,000 for condos.
- Time to Save for a Down Payment: 296 months for houses and 57 months for condos.
- Premium for Owning Over Renting: 37% for houses and over 40% for condos.
These figures paint a grim picture for potential homebuyers, especially Millennials and Gen Z, who might not afford a home until their 50s or 60s.
Future Affordability: A Long Road Ahead
According to a recent report by the Bank of Montreal, housing affordability might not return until 2027, and even then, only slightly. Factors contributing to this include:
- Rate Cuts Unlikely to Return to Pandemic Levels: The days of sub-3% rates are likely over.
- Lack of Creative Solutions from Government: High demand and insufficient policy innovation continue to keep prices high.
Societal reliance on housing as a source of income or retirement nest egg further complicates matters. Policymakers hesitate to significantly lower house prices to avoid erasing retirement savings and disposable incomes.
NIMBY Policies and Market Dynamics
Not In My Backyard (NIMBY) policies restrict what can be built and where, favoring single-family homes over multi-unit developments. This trend has led developers to focus on investor-targeted properties rather than homes for end users.
Currently, there are around 13,000 condos listed on the Toronto MLS, mostly studios and small units not suitable for families. The result is hyper-density in certain pockets like City Place and Liberty Village, while vast areas remain designated for single-family homes.
Hidden Gem Neighborhoods: Affordable Options
Despite these challenges, there are beacons of hope in Toronto. Certain neighborhoods in the northwest, such as Eglinton West, St. Clair West, and Weston, offer more affordable housing options.
- Current Listings in York:
- 78 Listings: Starting at $500,000 for vacant lots.
- Example: A 4-bedroom, 2-bathroom home listed for $635,000, move-in ready with potential for an additional suite.
These neighborhoods provide access to CMHC financing, making it easier to buy a house without needing a 20% down payment.
For those interested in condos, family-sized units are available for under $750,000 in the old neighborhood of York. For example, a building on Hickory Tree Road offers spacious condos with excellent amenities and proximity to parks and transit.
Discover More
If you’re interested in learning more about these hidden gem neighborhoods, check out our neighborhood tours on our channel. These videos provide in-depth insights into areas like Fairbank, Earl’s Court, Weston, Mount Dennis, and Oakwood Village.
Feel free to reach out if you have any questions about the neighborhoods or listings. Book a call or send us an email at [email protected]. We’re here to help you find the perfect home in Toronto.
Conclusion
Affordable housing in Toronto isn’t entirely a myth. It requires knowing where to look and having an open mind. While the city is expensive, there are hidden gem neighborhoods that offer more affordable options. If you found this post helpful, please like, subscribe, and share it with friends and family who might benefit from this information.
As always, the best things in life are where you least expect them. Keep an open mind, stay positive, and stay knowledgeable. Peace out.
