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<\/a><\/p>\nPhoto: Joe Howell\/Flickr<\/a><\/em><\/p>\n In the Greater Toronto Area, where the average price of a detached home is well over a million dollars, condos have represented the final vestige of affordability for many first-time buyers.<\/p>\n Those days could soon be over, just as they previously passed in Vancouver, suggests BMO Senior Economist Sal Guatieri.<\/p>\n \u201cThe typical family in the GTA is priced out of the detached market, with condos the last refuge, and even that won\u2019t last long if prices continue to escalate,\u201d writes Guatieri in a recent client note<\/a>.<\/p>\n From October to November last year, a household taking home the median-family income would have to put 20 per cent of its earnings towards mortgage payments for a benchmark-priced condo (assuming a downpayment of 10 per cent on a 25-year mortgage).<\/p>\n Yet typical households could get stretched to the brink if mortgage rates rose by 2 percentage points. In that case, these households would have to contribute 39 per cent of their gross income \u2014 the maximum ratio \u2014 covering ownership costs.<\/p>\n That\u2019s if condo fees, property taxes, insurance and utilities are figured in. \u201cAn income-chopping recession would also push this ratio higher,\u201d Guatieri adds.<\/p>\n The benchmark price of a condo in the Greater Toronto Area hit $381,500 in December 2016, having risen 15.2 per cent in a year, according to the Toronto Real Estate Board.<\/p>\n \u201cShould interest rates rise sharply, even currently affordable condos could become too expensive for the median-income family,\u201d he states.<\/p>\n Observers have generally called for the Bank of Canada to stand on the sidelines through 2017 by keeping the key interest rate, which influences mortgage rates, at its current historically low level of 0.5 per cent.<\/p>\n