Household Income Stats

With the federal government’s decision to provide mortgage assistance to households making under $120,000, it seems logical to learn how many households in Toronto would qualify, assuming they were also first-time home buyers. The following information was gathered to learn how many Toronto households could afford the average priced home in city.

Diving deeper into Stats Canada unearthed household income ranges for all of the city of Toronto’s 1,112,930 households. Stats Canada provides the following distribution of household incomes for Toronto:

Income Number of Households
Under $5,000 33,190
$5,000 to $9,999 23,455
$10,000 to $14,999 36,550
$15,000 to $19,999 54,025
$20,000 to $24,999 47,315
$25,000 to $29,999 47,500
$30,000 to $34,999 46,945
$35,000 to $39,999 47,115
$40,000 to $44,999 46,290
$45,000 to $49,999 44,650
$50,000 to $59,999 84,180
$60,000 to $69,999 76,120
$70,000 to $79,999 68,190
$80,000 to $89,999 60,400
$90,000 to $99,999 53,485
$100,000 and over 343,520

A secondary analysis of the households making over $100,000 offers this insight:

Income Number of Households
$100,000 to $124,999 100,810
$125,000 to $149,999 68,300
$150,000 to $199,999 77,810
$200,000 and over 96,600

(Source: Stats Canada https://bit.ly/2CEUBbP)

Googling “income needed to buy a house in Toronto” leads to various results depending on the date of the article and the average sale price in Toronto at that time.  However, taking an estimate from the prices quoted (roughly $730,000 – $860,000) showed that to buy a home costing $800,000 requires a household income of roughly $140,000 – assuming that you have a standard down payment.  Naturally, if the buyers have hundreds of thousands in their bank account from selling their previous home at a substantial profit they could afford more (I hope to find information on wealth creation for another posting in the future).

Taking the numbers above we can estimate that around 150,000 households in Toronto make $140,000 or more, thus enabling them to be average home owners.  However, this equates to only 13% of households.  Perhaps all households have made tremendous amounts of wealth during the housing boom, so impressive income levels are not needed, but I would guess that is unlikely.

With the information above we can better understand how many people can actually afford housing prices when newspaper and online articles say a six figure household income is needed to buy a home in the city.  While it is a large number of total households, it barely better than 1/10 overall.  That leaves a significant number of people behind.  Shouldn’t the average household be able to afford the average home?

Thank you again reader for taking enough interest to reach out.  I hope this information was what you were looking for.

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