Photo: Patrick Tomasso / Unsplash

For buyers looking to purchase a home in the Greater Toronto Area, prices in their preferred cities may have jumped more than their annual take-home pay over the last year.

It’s no secret that the GTA real estate market took its time getting off the ground in 2019. Climbing up from a decade-low sales record in 2018 and adapting to the effects of the federal mortgage stress test, 2019 was a bounce back year for one of Canada’s most popular markets. Low interest rates and a population increase, among other factors, boosted buyer demand in the third and fourth quarters, setting home prices on an incline to a 4 percent year-over-year increase and resulting in an average GTA home price of $819,319 for 2019. Now, we’re getting a better look at how much these price gains have eclipsed household earnings.

Canadian real estate brokerage, Zoocasa, released their findings today in a report that compares 2019 median home prices and increases across seven GTA regions and their municipalities with local post-tax incomes. The report uses median home prices from the Toronto Real Estate Board and measures them against median after-tax income data from Statistics Canada to demonstrate how home values have grown parallel to regional household earnings.

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Of all of the GTA regions, the City of Toronto experienced the most drastic median home price increase to income comparison, as price gains were almost proportionate to a year of after-tax income. Median home prices were said to have increased by 8 percent year-over-year to $720,000, a $55,000 difference that equals 94 percent of the median Toronto resident’s post-tax earnings of $58,264.

Central Toronto saw the steepest price contrasts — median prices increased by 9 percent from the year prior to $705,800, a $55,800 difference that accounts for 96 percent of a local household’s total median wages. The city’s outer communities felt less of an impact. Toronto West saw an 8 percent price jump to $715,000, which is a $55,000 increase and about 94 percent of after-tax earnings. Similarly, Toronto East prices rose by 6 percent to a median price of $740,000, up $45,000 and proportional to 77 percent of median post-tax income.

Seeing the second-highest price increases in the GTA, Peel Region ranked below Toronto, as median prices jumped by 6 percent year-over-year. With a new median price of $700,000, the $40,000 price difference accounts for 53 percent of household incomes, post-tax.

Luckily for the GTA’s most northern municipalities, where prices tended to increase the least, price growth consumed less of regional incomes, proportionally speaking. Simcoe County saw the smallest median price hikes in the GTA with a price growth of just 2 percent, bumping median home prices up to $588,250 — the $13,250 price difference accounted for just 20 percent of the local median after-tax income of $67,022. Simcoe’s rural Adjala-Tosorontio Township saw the steepest decline in home prices, which dipped by 10 percent year-over-year to $630,000, leaving a difference of $69,000 that makes up -81 percent of community wages.

Following closely behind Simcoe County, York Region harboured a 2 percent price boost, as median home prices climbed to $850,150. The $20,150 difference constitutes 24 percent of after-tax incomes. Durham Region experienced the second-lowest price fluctuation, with median prices rising 4 percent to $580,000, a $20,000 year-over-year increase that makes up 26 percent of median earnings.

To see the full spectrum of price hikes proportional to local after-tax incomes, check out the Zoocasa infographic below:

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