"A down payment on a Toronto house should take 24 years to accumulate", reading the article this seems to be based on a severe case of dyscalculia. If the apartment costs 1 million and you want to save until you have 6% (which is 60k), and you only save 10% of your annual 170k salary, meaning you save 17k per year so after 3 years plus you have the down-payment. In addition to proper math one also should probably save a bit more per year.
So, 23 years instead of 24? Or 3.5 years instead of 3? Your correction without conclusion doesn’t seem helpful in deciding which calculation is least wrong.
The math is $1,000,000 is the average price of a house in Toronto[1]. You usually need 20% down for a house at $1M or more[2]. Therefore you need $200,000 downpayment, which at $11K / year is about 18 years, assuming no compounding (which at least today is basically the case currently in Canada with interest rates where they are).
It should be noted though that it is pretty rare to reach $175K salary in the GTA before turning 30 (Average household income in Toronto is sub $100K[3]). Therefore for the majority of people it will take more than 18 years to build up that down-payment, which could be where the number in the article came from.
Actually if you really want to save 60k with a net annual salary of 111k, you could do it in prob 2 years (cancel you Amazon account). Ard 6,500 CAD per month should be enough to live by, shouldn't it.
Not sure where you got the numbers but to buy a 1m condo in Toronto would require closer to 250k not 60k. And that isn’t taking into consideration the condo will also be up 8-10% next year.
I don't think you can get a mortgage with a 6% downpayment anymore. Canadian real estate is a scam. Banks would lend to anyone with a 5% downpayment. The mortgages are insured by the government (CMHC), so essentially all the taxpayers are on the hook if the real estate market implodes. Banks will be fine though as usual.
Anything over a million requires a 20% down payment. Also, prices doubled over the last 5 years so if trends continue then a million dollar home today will take a 400k down payment if it takes 5 years to save
"Past performance is no guarantee of future results"
The housing market can only grow as far as people are willing and able to pay for. Sure, you may have a few international investors distorting the picture, but for the wider masses of homes you still need a strong local base to prop up the average price.
My impression is that in Toronto, we went from a market that's affordable enough for lower-to-mid-income households to a market that's only affordable to high-income households. Apparently there are still enough people to finance this. But with another doubling of prices vs. salaries, I feel like even high earners wouldn't be able to buy in en masse, and that's where there's a limit to price growth. Not sure about the exact number, but we're probably not far off from it at this point.
There's also the issue with interest rates, which may be able to fall a little further and dip into negative territory when the next regression comes, but we probably won't be able to replicate the decrease in rates over the last 10 to 30 years. And lower rates are really what drove up housing prices in the recent past.
Of course, if companies start to approach Bay Area salaries, we'll raise the price growth limit as well. Personally, I don't worry too much about housing options for software developers and more about the gap between us and the low-wage retail, restaurant, underpaid or underemployed rest of the city. Who cares about home ownership when your friends are moving back to their parents in the prairies.
I understand what your saying and it would be correct if prices were stable. The problem is that prices increase so rapidly and there is severe stagnation in salaries that you can't keep up. In OCT 2019 a Condo in a CO-OP I was looking at was selling for 350k. By Jan 2020 they were selling for 500k. It is not unusual for your 1-2 million dollar house to go up by 10-20 % a year.
Edit: I am basically criticizing the article linked from the comment: https://nowtoronto.com/lifestyle/toronto-real-estate-afforda... Apart from the calculation wrong I also think the numbers/assumptions are not good