Last month, the Toronto Real Estate Board reported a harsh reality for homebuyers in the region: if you want to live in a detached home, prepare to pay over a million dollars.
That’s $1,336,640 to be exact – the average price of a house in the city proper, or the relative bargain of $999,102 for one in a further-flung GTA community. Either way, that’s still far out of reach for the average Toronto real estate buyer, who earns a median income of $76,219*.
Lack of affordability within city limits
In fact, even the most fastidious saver at that income level will find themselves hundreds of thousands of dollars short on a detached home purchase, regardless if they can pay 20% down and score a competitive mortgage rage; assuming a five-year variable rate of 2% and a 30-year amortization, they’d still only qualify for a maximum of $636,886, according to Ratehub’s mortgage calculator.
It doesn’t help that once-ordinary one- and two-storey homes now regularly command heated bidding wars which drive the price well above asking, as was the case with this Don Mills home, which recently sold for more than a million over its $1.19-million listing.
Exploring other housing options
To get around affordability challenges, some buyers choose to “drive until they qualify,” accepting a lengthy daily commute if it means owning a house with a yard. Others may settle for high-rise living; raising a family amid smaller square footage has grown so much more common that developers are now including larger units with multiple bedrooms in their planning.
Are townhouses the missing middle?
But for others, downsizing to a condo or moving beyond city limits just won’t cut it – they want to stay in the city, and have more living space, too. For this home buying segment, townhouses seem to be the perfect compromise, finds data compiled by Zoocasa.com.
According to the data, the average townhouse can be had for an average of $562,18. That’s still well within the realm of mortgage affordability and won’t break the bank for the average Torontonian. And while townhomes have seen their fair share of recent Toronto real estate price surges, appreciating 53.3% in value since 2011, that’s still well below the 83.3% surge experienced by the detached market.
So where can aspiring Toronto homeowners get the most townhouse for their buck? To aid in their affordability search, Zoocasa has outlined the 20 most affordable neigbourhoods for Toronto townhouses in the infographic below.
*2011 Canadian Census
- Average Mortgage Payments in Toronto
- The Best Time to Buy a Home in Toronto
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