Skip to main content
Open this photo in gallery:

If you are living in Vancouver on a median income and start saving now, it will take 28.5 years to be able to afford a down payment to buy a house, according to a recent report on housing affordability from the National Bank of Canada.DARRYL DYCK/The Globe and Mail

If you start saving now, you could have a down payment to buy a house in Edmonton, Winnipeg or Quebec City by the end of summer 2025.

Add another 12 to 18 months for Montreal and Ottawa. For Toronto and Vancouver, figure on darn close to never. A recent report on housing affordability from National Bank of Canada says it would take 311 months for Toronto, or just about 26 years, and 342 months in Vancouver, or 28.5 years for a household on a median income.

Falling house prices have done little or nothing to make owing a home more affordable because of the offsetting burden of higher mortgages rates. But lower prices do reduce the amount people have to save for a down payment. Looking at down payment trends tells us a couple of key things as we look ahead to the spring busy season for the housing market.

Big mortgages, few listings and fierce competition: Welcome to the spring housing market of 2023

Stress test podcast: Rising interest rates brought pain for new homeowners - and opportunity for house hunters

One is that there are some cities where down payments are affordable today and not too much higher than historical levels. The other is that some cities are an affordability desert for the middle class, even after price declines.

The National Bank report’s headline finding is that housing affordability improved in the fourth quarter of last year for the first time in more than two years. But while mortgage payments as a percentage of income fell a little from the previous three months, they remained at historically high levels. It’s in down payments that we see the most encouraging signs of affordability, at least in some cities.

National Bank estimated how long it would take a household to build the minimum down payment on a typical home in a city by saving 10 per cent of the pretax median income, which is an aggressive target. It was assumed the savings earned no interest.

Winnipeg stands out among the 10 cities examined as a place where young adults can relatively quickly save a down payment. Just over 29 months of saving were required to buy a home in the final three months of 2022, compared with an average 22.3 months going back to 2000.

Calgary’s getting lots of attention as a landing spot for young adults priced out of Ontario and B.C. housing markets, but Edmonton is friendlier to home buyers. The median house price is cheaper, and the 29.2 months needed to save a down payment is a little more than six months less than Calgary.

Explainer: A tax-free savings account is coming for new home buyers. What you need to know

The down payment outlook in Toronto is a reality check for anyone wondering how affordability in the country’s largest city has changed in the past year of rising rates and falling prices. To sum up, Toronto remains a market where you can expect to buy in only if you have a high income or parental help with a down payment.

Home prices in the city are down from peak levels, yet National Bank still pegged the median cost at $1.2-million at the end of last year. Meanwhile, the median annual household income in the city was $91,389.

A household at the median income level can expect to have a down payment saved in 2049, assuming level income and savings. So, maybe a condo instead? Just over five years of saving would be required to get into a representative condo in Toronto priced at $713,480, according to National Bank.

One thing to note about Toronto’s market is that, like Vancouver, median prices are above $1-million. Starting at the $1-million mark, buyers need a minimum 20 per cent down payment for an insured mortgage. Below that price, the availability of mortgage default insurance means down payments as low as 5 per cent are possible.

Edmonton might be Canada’s affordability king for condos. Just 15 months of saving are needed to buy into a market where $230,600 gets you a typical place to live. A Calgary condo takes 18.5 months of saving at the median household level, while Winnipeg and Quebec City condos take about 19 months.

The saddest affordability story could be Hamilton, where houses have soared in price because of the city’s location a short drive west of Toronto. Hamilton remains more affordable than Toronto, but you still need 78.7 months to build a house down payment. That’s more than double the average 32.7 months since 2000.

Are you a young Canadian with money on your mind? To set yourself up for success and steer clear of costly mistakes, listen to our award-winning Stress Test podcast.

Go Deeper

Build your knowledge

Follow related authors and topics

Authors and topics you follow will be added to your personal news feed in Following.

Interact with The Globe