toronto-montreal-saving-downpayment-home Photo: James Bombales

Montreal’s much more affordable housing market has long made Torontonians envious, whether you’re renting or buying your forever home.

Now data published by National Bank of Canada this month reveals how stark the disparity has become when it comes to the homebuying experience in Canada’s two largest cities.

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The bank’s Housing Affordability Monitor calculates housing affordability by looking at changes over time to the monthly mortgage payment on a median-priced home, assuming a 25-year amortization period and a five-year term.

Even with a household income of at least $183,594, it would take a Toronto buyer 297 months — or just shy of 25 years — to save up for a downpayment on what the bank describes as a “representative home” in the Toronto region. According to National Bank, the price of a representative home in Toronto was $1,069,111 in the first quarter of 2021.

In Montreal, it is, unsurprisingly, a much different story. With a household income of $94,760, a Montreal buyer could accumulate a downpayment for a representative home in just 40 months. That’s just over three years, creating a more than 21-year gap between Montreal’s downpayment savings time and Toronto’s.

Of course, this is mostly illustrative of the serious affordability problems facing Toronto homebuyers. No buyers are actually waiting it out for nearly 25 years to save for a downpayment on their first home and the price of a representative home changes constantly.

But the National Bank data paints a grim picture of just how out-of-reach saving for a home can seem for many Toronto residents and it’s hard not to look on with a twinge of jealousy when hearing about the much more reasonable situation in Montreal.

According to the bank’s report, Toronto’s condo market is predictably more accessible to first-time buyers. A buyer with a household income of $125,202 could save for a condo downpayment in 51 weeks, or just over four years.

Montreal condo buyers need a far lower household income — $69,459 — to save for a condo in just 29 weeks, or slightly more than two years.

What’s particularly striking is how relatively close Montreal’s downpayment savings periods for homes and condos are — just 11 months separates the two property types. In Toronto, it’s a staggering 246 months, a sign of how far the region’s single-family home market has drifted from the condo market in the last year.

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