GTA Housing Affordability Indicator February 2010

Wednesday, March 10th, 2010 at 7:55 am

Comparisons are often made between the current real estate boom and the one experienced in the Greater Toronto Area from 1986 – 1989. While there are some similarities, there are a number of key differences that have contributed to the extended real estate ‘boom’ here in the GTA.

The most important difference has to do with affordability. Affordability refers to the share of average household income used to pay the mortgage, property taxes and utilities on a home. As you can see from the chart below, there is a dramatic difference between the current affordability level and the levels experienced throughout the course of the real estate boom in the late 1980′s. At it’s peak in 1989, nearly 55% of every household dollar earned went towards paying the mortgage, property taxes and utilities!