High Earners Struggle to Save for Down Payments in Canada
Securing a six-figure yearly income doesn’t guarantee quick entry into homeownership, according to recent findings.
report
A national real estate company called Zoocasa has published a report that looks at how long it takes for individuals making an annual salary of $100,000 to accumulate enough funds for a down payment on a house across 25 significant secondary real estate markets in Canada.
The research adopted a saving ratio of 20 percent of post-tax income to accumulate funds for a down-payment.
In the most affordable housing market examined, which is Thunder Bay, it would still require a potential purchaser nearly one year and two months to save up a 5% down payment—approximately $17,000—to buy an average-priced home valued at around $339,000. If someone aimed to set aside money for a more substantial 20% down payment of approximately $68,000, they would need almost four years and ten months to achieve this savings target.
In Calgary, individuals with an income of $100,000 would need two years and eleven months to afford the average-priced home valued around $654,000 with a down payment of approximately $41,000. Furthermore, saving up for a 20 percent down payment—amounting to almost $131,000—would take such a buyer roughly nine years and six months.
In Greater Vancouver, the longest timeframe was observed for earners making $100,000 annually. Saving up for the minimum down payment—five percent on the initial $500,000 plus ten percent on the remaining portion of an average property value around $1.24 million—would require almost seven years. This amounts to approximately $99,000 as the required down payment. Achieving twenty percent down—which totals roughly $248,000—would necessitate 17 years and three months, or close to this figure.