Home ownership is out of reach for many middle-class families who dream of buying a house in their neighbourhood, according to an analysis of MLS sales data by the Toronto Star.

The analysis shows that in every one of the city’s 140 neighbourhoods, the income needed to purchase a median-priced single-family house — even with a 20 per cent down payment — is tens of thousands of dollars more than what a typical median-income family living there earns.

Even in the most affordable area of the city — Mount Dennis, the neighbourhood around Weston Rd. and Eglinton Ave. — a purchaser would need an annual income of more than $100,000 to qualify for a mid-priced home at $616,500.

That income is double what a typical family living there earns in a year, according to Statistics Canada income data from 2015, the most recent year available.

Condos are more affordable, but a median-priced unit in 100 or more of the city’s neighbourhoods still had a selling price above the purchasing power of a typical family residing there.

The data also shows:

Forty-six per cent of all single-family houses sold in Toronto in 2018 went for more than a million dollars.

That’s slightly less than a mid-priced single-family house in Regent Park, where poverty levels were once the highest in the city. At a median selling price of $1.025 million, a buyer with 20 per cent down would need an income of $171,659 to qualify for a mortgage.

In the Bridle Path-Sunnybrook-York Mills neighbourhood, the median price of a single-family home was nearly four times that. A household would need an income of $655,487 a year, and 20 per cent down, to afford its $3.98-million price tag — and mortgage payments of just over $19,000 a month.

In two of the city’s hottest-selling neighbourhoods, Stonegate-Queensway, which is in the southwest part of Toronto near the Kingsway, and in the Beach to the east, median prices were $1.12 million and $1.26 million respectively.

In at least nine neighbourhoods, including Bedford Park-Nortown, Newtonbrook East, Forest Hill South and Yonge-St. Clair, 100 per cent of the houses that changed hands — and there were hundreds of them — sold for more than a million dollars.

What that means, according to experts interviewed by the Star, is that only the wealthiest buyers, or those with equity in their current home, can afford to buy a single-family house.

First-time buyers who aren’t gifted with large down payments from parents or grandparents are virtually shut out of the market.

A recent report from the city’s affordable-housing office estimates that it can take anywhere from 11 to 27 years for a renter in Toronto to save 10 per cent down for a median-priced home.

No one knows exactly what caused house prices to rise so quickly in Toronto, or in Vancouver, where prices had a similar trajectory.

Joshua Gordon, an assistant professor at Simon Fraser’s School of Public Policy, believes that in Toronto, foreign buyers with a lot of capital competed for houses at the high end of the market, which drove up prices, precipitating the current crisis. Gordon wrote a report for the Ryerson City Building Institute in 2017.

Research by his colleague Andy Yan, an adjunct professor in SFU’s urban studies program, appears to back up his premise.

Yan analyzed data earlier this year from the Canadian Housing Statistics Program database and found that properties in the city with a non-resident on title had median prices that were tens of thousands of dollars higher than those purchased by residents, which gives credence to Gordon’s theory that foreign buyers were entering at the top tier of the market.

However, not everyone agrees with that theory.

Toronto realtor John Pasalis, who founded the real estate firm Realosophy, thinks that phenomena of foreign buying was localized in places such as York Region — not in Toronto — and that the bubble was more likely caused by investors.

“People were refinancing their homes, taking $200,000 or $300,000 out of their primary residences to use as a down payment on an investment property,” says Pasalis, who is working on a doctorate at the University of Toronto on micro trends that can predict housing bubbles.

Whatever the cause, the market started to take off in Toronto in 2016 and prices went to a whole new level.

“About seven years ago you could buy a semi-detached house in Leslieville with a finished basement and parking for just over $600,000,” says Pasalis. “Today, that same buyer with the same budget is getting a one-plus-den condo.

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“It’s a huge difference.”

Overall, house prices in Toronto stopped climbing after the Ontario government introduced a foreign buyers tax in April 2017, according to research by Gordon. The tax is set at 15 per cent of a purchase price.

Pasalis, however, says the decline wasn’t a result of the tax, but the idea of it.

“When the province hinted that they were going to introduce this foreign buyers tax, a lot of people saw that it cooled down Vancouver’s market,” he says. “Towards the end of March, beginning of April (2017), sellers started flooding the market because they were worried that prices were going to tank.

“And it ended up being like a self-fulfilling prophecy,” he says. The “tax was sort of the prick that started to deflate the bubble.”

Prices across the country are also down 3.4 per cent due to the stress test, according to CMHC, which has a mandate to ensure housing, owned or rented, is affordable.

Initially applied to some insured mortgages — those with less than 20 per cent down — the scope of the stress test was broadened in 2018 to include almost all mortgages.

The test requires purchasers applying for an insured mortgage — which means they are putting less than 20 per cent down and must purchase mortgage insurance — to qualify at the higher of two rates: the one offered by their lender or the Bank of Canada’s five-year benchmark rate which has recently hovered above 5 per cent.

Buyers with 20 per cent or more down have a similar requirement, but they are subject to the bank’s five-year benchmark rate or their lender’s rate plus two per cent, whichever is higher. They are not required to buy mortgage insurance.

Builders, lenders and realtors are now blaming the stress test for causing a slowdown in the Toronto market — although recent figures from the Toronto Real Estate Board show a slight recovery in June — and for making it even more difficult for first-time buyers to purchase a home, according to a recent story by the Star’s real estate reporter Tess Kalinowski.

But removing it could cause prices to climb again, cautions CMHC.

“When it’s easier to buy, it can put more pressure on the market and push prices even higher,” says Geneviève Lapointe, a senior market analyst with the housing corporation.

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Method: The Star analyzed 2018 sales data provided by Zolo.ca, which carries MLS listings.

A median sale price was calculated for single-family houses, which include detached, semi-detached, townhomes, row houses and combined storefront/apartment, and separately for condos, co-ops and condo townhomes, in each neighbourhood. Median, in this case, is the middle price, with an equal number of sales above it and below it. Median was used so that a house sale with a very high or very low price wouldn’t affect the median price in a neighbourhood, as it would if an average was used.

A 20 per cent down payment was deducted from the median sale price to calculate the balance and mortgage payments.

CMHC requires that homes priced at a million dollars or more have a 20 per cent down payment, and, for consistency’s sake, that figure was used to calculate the balance owing on all median-priced homes and condos by neighbourhood. (For more explanation on required down payments go to CMHC.)

From there, Ratehub.ca used industry-standard software to calculate mortgage payments based on the balance. It used those mortgage payments to determine how much income a buyer would need to afford the home, including property taxes, estimated annual heating costs of $1,500 a year and 50 per cent of condo maintenance fees where applicable, which are included in the calculations. All of that must be a maximum of 39 per cent of a buyer’s gross income.

The mortgage rate used by Ratehub was subject to the stress test. The higher rate on the day Ratehub started the calculations was the Bank of Canada rate of 5.34 per cent, which was higher than the median posted rate on Ratehub’s site of 3.3 per cent for a five-year fixed-rate mortgage, plus the 2 per cent stress test.

The median household income figures by neighbourhood are from Statistic Canada’s 2016 census.