Homeownership an impossible dream for most renters from Ajax to Burlington

Homeownership is out of reach in 24 of Ontario’s largest cities, where renters earn 13 to 59 per cent less than the minimum income needed to comfortably cover the mortgage for a starter home. Aspiring owners are particularly priced out in 12 cities, where they earn about half the required amount and completely shut-out in communities like Ajax, where there are no starter homes for sale at all.

These are some of the results from a study on housing affordability in Canada performed by Point2 Homes, using 50 per cent of each community’s average home sale price as the benchmark for a ‘starter’ home.

Starter homes used to have a very well-defined place on the housing market, according to Point2. Also known as entry-level homes, these properties were smaller dwellings, hovering around $200,000.

Nowadays, they increasingly seem to defy definition. Whether they’re small or sprawling, less than $200,000 (not in Ontario) or more than $700,000, it’s the market that dictates the definition of the starter home.

Even if there is plenty of choice in a city’s starter home inventory, it doesn’t actually make them affordable to the average homebuyer. Renters in Richmond Hill, Oakville, Markham, and Vaughan earn an average of $70,000, but they would need around $160,000 and even close to $170,000 to afford a starter home in their city. Burlington renters earn even less, although starter homes there aren’t much cheaper.

Oshawa fares a little better, with their starter home benchmark a relatively low $429,800, but the average renter income of $67,880 still makes home ownership a nearly impossible ask. It’s less rosy in Whitby and Ajax, with $134,123 and $128,404, respectively, required in income to purchase a starter home. Average renter incomes in the two towns are $67,880 and $70,422.

Renters in Richmond Hill and Oakville have it the worst, each falling nearly 60 per cent short of achieving their homeownership dream;

In fact, renters in 36 of 50 cities surveyed can’t afford a starter home in their hometown, earning up to 60 per cent less than what they would need to become homeowners and Ontario cities absolutely dominate the list.

But, aside from the 14 cities where the situation is most dire for aspiring homebuyers, in 10 more cities renters fall short by 30 to 40 per cent Being so far away from achieving their homeownership dream is a nightmare, says Point2, but earning 80 per cent or even 90 per cent of the income needed to afford a home is the real Gordian knot: Not knowing whether to make the jump to homeownership or not keeps renters in a tense, frozen decisional space — their very own housing limbo.

With files from Andra Hopulele at Point2.