Incomes to Qualify for Housing: $268,000 in Vancouver, $268,000 in Toronto

The current climate of escalating home ownership costs, and potential buyers are facing unprecedented challenges. With record low interest rates of 0.25% by the Bank of Canada, and eventual inflation rates of 8.1%, home prices reached record high prices. The Bank of Canada’s efforts to curb inflation have led to substantial interest rate hikes, making it harder than ever to purchase a home. According to RBC, their aggregate affordability measure reached a record high of 62.7%, marking the worst level of affordability on record. Over the past year, the qualifying income required to purchase a typical home has soared. In Vancouver, the minimum qualifying income increased by 34% to $268,000. Toronto saw a similar spike, with required income jumping 29% to $240,000. These steep increases have made home ownership nearly unattainable for many, particularly in high-demand areas like Vancouver and Toronto. The struggle extends beyond these expensive markets. Even in cities like Halifax and Saint John, where the qualifying income rose by 44% and 41% respectively, potential buyers face significant financial hurdles. RBC notes that this trend is widespread, with buyers in cities across Canada requiring deep pockets to meet mortgage qualifications.

Amid these challenges, purpose-built rentals emerge as a critical component of the housing market. As home ownership becomes less affordable, the demand for rental housing is increasing. Purpose-built rentals, specifically designed and constructed for long-term rental use, offer a stable and sustainable housing solution. They provide much-needed relief to those who are priced out of the ownership market. Firstly, they help address the immediate housing needs of Canadians who cannot afford to buy homes in the current market. As RBC highlights, affordability issues are at their peak, making rental options more crucial than ever. PBRs provide a reliable alternative, ensuring that more Canadians have access to quality housing. Secondly, purpose-built rentals contribute to a more balanced housing market. They help stabilize rental prices by increasing the supply of rental units, which is essential in cities where demand far exceeds supply. This stabilization is crucial for maintaining a healthy and sustainable housing market in the long run.