Residential real estate markets are not in the best state of health. Many people have written (including us) that real estate prices have far exceeded the average family’s ability to pay. While this is true, a recent report points out that 11% of households in Toronto made over $150,000 per year. At this level of income, a mortgage for a $1 million home is realistic and manageable.
That 11% equates to 264,110 households in Toronto alone that can afford a $1 million home. And this number has increased quite a bit in just one year. In just one year, 40,259 households have joined the $150,000 income per year group.
So what does this mean? Despite the hype of high housing prices, a large buying base does exist. It doesn’t mean that everyone in this income bracket is searching for a home. And it doesn’t mean that housing prices are not an issue, especially for first time buyers.
The main point is that at least a portion of Toronto’s economy, is strong. This is indicated by larger amount of households making $150k+ per year. Will this demographic be enough to keep the GTA real estate market going strong? Even if they are, first time buyers and low income earners are left without many options which will continue to trouble the GTA.
Photo Courtesy of Mark Moz