Homes in Kitchener-Waterloo, Guelph unaffordable for single buyers, says study

A new study found that on average, single people looking to purchase homes in Kitchener, Waterloo or Guelph do not make the income necessary to qualify for a mortgage on the average home.

K-W, Guelph ranked among the lowest for affordability among cities studied

Buying a home Kitchener, Waterloo or Guelph a struggle for single home buyers. (Graeme Roy/Canadian Press)

Single people looking to buy homes in Kitchener-Waterloo often have a tougher time than their counterparts in other parts of the country, according to new research from a tech-based real estate brokerage firm.

Zoocasa looked at 20 cities across Canada, and found that most single people looking to purchase homes in Hamilton, Kitchener, Waterloo or Guelph do not make the median income necessary to qualify for a mortgage on the average home in the area. 

The survey looked at average prices in those 20 markets, and calculated what the minimum income would have be in order to qualify for a mortgage on those homes. They then compared that minimum amount to what the actual median incomes were for single people in those areas.

K-W ranked 7th most pricey

"Kitchener-Waterloo actually ranked as the 7th least affordable," said Penelope Graham, managing editor at the Toronto-based firm.

For Kitchener-Waterloo, the median income of all single people aged 25-64 is about $51,000, but the median income of single workers aged 25-34 is a bit under $49,000. So single buyers at that income in the younger demographic would be about $18,000 short annually if they wanted to purchase the average K-W home at $484,000.

CITYAVG HOME PRICE JAN 2019INCOME REQ'D FOR FINANCIAL SUSTAINABILITYMEDIAN INCOME, SINGLE PERSON 25-34
Vancouver$1,019,600$139,082$46,308
Toronto$748,328$102,079$51,288
Victoria$633,386$86,400$41,666
Abbotsford$590,900$80,604$43,236
Hamilton$550,058$75,033$47,519
Guelph$522,300$71,247$47,603
Kitchener-Waterloo$484,076$66,032$48,664
Calgary$449,420$61,305$64,130
Ottawa $432,829$59,042$49,581
London$383,791$52,353$41,959
Assuming 20% down paymentPrices from Real Estate BoardsUsing Ratehub mortgage calculator @3.29%Income from Statistics Canada

-Zoocasa


Put in national perspective though, Graham says Kitchener-Waterloo is far from the worst on the list. She says Vancouver, for example, is looking at a gap of $88,000 between average income and income necessary to be able to afford the average home.

"In relative terms [K-W's] considerably more affordable, but for someone who's trying to purchase the average home, they'd still fall short."

The most affordable cities for younger, single wage earners were (in descending order):

  • Saint John NB.
  • Charlottetown PEI.
  • Regina, Sask.
  • Saskatoon, Sask.
  • Lethbridge, Alta.
  • St. John's NL.

All hope is not lost for single people in K-W though, according to Graham.

She says residents who want to purchase a home in the region can increase affordability by downsizing their housing expectations, increasing their down payment where possible, and trying to negotiate a lower mortgage rate.