Dreaming of owning your first home in Canada? For many, that dream feels elusive amidst skyrocketing home prices, high rents, and rising living costs. A recent study by Money.ca sheds light on the most and least affordable cities for homebuyers, offering insights into where Canadians can save for a down payment faster and get closer to their goal of homeownership.
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Top 10 Cities Where Renting and Saving Are Most Affordable
If you’re looking to rent while saving for a home, some Canadian cities stand out for their affordability. Quebec City ranks as the most budget-friendly for renters, with just 21.6% of the average annual income of $50,500 allocated to rent. This translates to an average monthly rent of $911 for a one-bedroom unit.
Here’s a look at the top contenders:
- Quebec City
- Rent-to-Income Ratio: 21.6%
- Average Rent: $911/month
- Average Income: $50,500/year
- Montreal
- Rent-to-Income Ratio: 26.3%
- Average Rent: $960/month
- Average Income: $43,800/year
- St. John’s, NL
- Rent-to-Income Ratio: 27.7%
- Average Rent: $904/month
- Average Income: $39,100/year
Other cities in the top 10 include Regina, Winnipeg, and Edmonton, all offering lower rents relative to incomes, making them ideal for saving toward a down payment.
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The Worst Cities for Rent Affordability
At the other end of the spectrum, Canada’s largest urban centres—Toronto and Vancouver—rank as the least affordable cities for renters. In Toronto, nearly half of a resident’s income (48.5%) goes toward rent, leaving little room for savings. Vancouver isn’t far behind, with renters spending 46% of their income on a one-bedroom unit.
Here’s a closer look:
- Toronto
- Rent-to-Income Ratio: 48.5%
- Average Rent: $1,691/month
- Average Income: $41,800/year
- Vancouver
- Rent-to-Income Ratio: 46%
- Average Rent: $1,697/month
- Average Income: $44,200/year
- Halifax
- Rent-to-Income Ratio: 41%
- Average Rent: $1,322/month
- Average Income: $38,700/year
High rent costs in these cities significantly hinder the ability to save for a home.
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Saving for a Down Payment: Fastest vs. Slowest Cities
The study also analyzed how long it takes to save for a 10% home down payment using the 50-30-20 budgeting rule, which allocates 20% of income to savings.
Fastest Cities to Save for a Down Payment
- Quebec City
- Average Home Price: $343,200
- Time to Save: 40 months (just under 3.5 years)
- Regina
- Average Home Price: $310,223
- Time to Save: 42 months
- Winnipeg
- Average Home Price: $346,654
- Time to Save: 49 months (just over 4 years)
Slowest Cities to Save for a Down Payment
- Vancouver
- Average Home Price: $1,193,808
- Time to Save: 162 months (13.5 years)
- Toronto
- Average Home Price: $1,104,592
- Time to Save: 158.5 months (13 years, 2 months)
- Vancouver Metro Area (Lower Mainland)
- Average Home Price: $1,128,008
- Time to Save: 154 months (nearly 13 years)
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Key Takeaways for Prospective Homebuyers
Location matters. Cities like Quebec City, Montreal, and Regina allow renters to save faster and with less financial strain. Conversely, urban hubs like Toronto and Vancouver pose significant challenges due to their high rental costs and property prices.
Consider your priorities. Is it worth dedicating over a decade to save for a down payment in an expensive city, or would relocating to a more affordable market make more sense?
Stay informed. As housing markets fluctuate, keeping up with local trends and opportunities can help you make informed decisions about renting, saving, and buying.
The Road Ahead
Saving for a home may feel like an uphill battle, but knowing where to focus your efforts can make the journey smoother. With the right balance of affordability and planning, first-time homebuyers can turn their dreams into reality—even in a challenging market like Canada’s.
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