Average income needed to afford a home in Waterloo Region on the rise

How much money you need to make per year in order to afford even a modest home locally continues to climb.

Across Ontario, new numbers suggest buyers need to earn a pre-tax annual income of more than $175,000 in order to afford a 1,500 square foot home.

That is according to finance and insurance website HelloSafe, which also finds the gross annual income needed to afford a similar home in the City of Kitchener to be about $25,000 higher, at just over $200,000.

“You know, I’ve done my math a few different ways and I think that might be slightly skewed on the high side,” said David Schooley, Broker, Remax/Twin City. “Regardless, affordability is a challenge right now.”

Schooley said while volume is down locally, prices are indeed up to their highest point since last May.

“It is a seller’s market because we have less inventory available, but that doesn’t mean you can put any price you want on a property,” he said.

Meantime, this latest report puts Kitchener around the mid-point among the more than 50 cities included.

It also finds homes in Guelph are less affordable ($221,829), while homes in Woodstock are more affordable ($159,205).

The most affordable city to own a home is Timmins, where 1,500 square feet requires gross annual earnings just under $65,000, or around $200 per square foot.

In Toronto, the least affordable city for homeownership, a similar home requires an annual salary seven times larger at just under $600,000, or around $1,400 per square foot.

According to HelloSafe, all numbers were calculated assuming a mortgage loan with a personal contribution between five and 20 per cent, at a fixed rate for five years of 4.89 per cent, over a total period of 25 years, and with a debt-to-income ratio of 36 per cent of disposable net income.