March 22

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What Income Do You Need to Buy a Condo in the Oshawa Area in 2024?

With Les Lamb

March 22, 2024


Do you find the costs involved in buying a home confusing? You are not alone. In this article, I’ll give you a complete financial breakdown of what it takes to buy a $500,000 condo in Durham Region in 2024.

Why Condos?

I’m using condos as an example for two reasons. First, condos are often among the cheapest options available in the market. Secondly, since I’m focusing on affordability, condo maintenance fees are a more transparent, and are sometimes a more affordable option than the hidden maintenance costs of a house. This is particularly true in the lower price range, where houses this cheap are usually in a less desirable area, or in need of costly repairs.

Current Prices

At the time I’m writing this post (March 21, 2024), 13 condos in Durham Region are marked as sold for $500,000 or less in the last 3 weeks. Most are apartments, a couple are townhouses. Most are one bedroom condos, some are two bedroom condos, and there was one three bedroom. Except for one outlier on the low end, all of them sold between $438,000 and $500,000, with the majority selling in the high 400’s. So for the following breakdown, I’m using a realistic but safe sale price of $500,000, which, if you were shopping for a home today, would offer you some selection.

Down Payment

If you are first time buyer, you can buy with as little as 5% down. In our $500,000 example, that’s $25,000. Granted, putting less than 20% down means a mortgage insurance premium will be rolled into your mortgage, but at least it gets you into home ownership. The alternative is to pay rent for a lot longer until you save up 20%, or $100,000, to avoid the premium.

Mortgage Payment

Using the mortgage calculator on my website, you’ll see that if you put 5% down on a $500,000 purchase and amortize it over 25 years at 4.79% (one of the best rates out there today), your monthly mortgage payment would be $2,814. As a resource, I have a dedicated page on my website where you can easily check current mortgage rates.

Property Taxes

The average property tax amount of the condos that have sold so far this month is $2,579 per year. Let’s make it an easy but still realistic $2,500 to keep things simple. for budgeting purpose, this works out to $208.33 per month.

Maintenance Fees

Condo maintenance fees vary widely. Of the condos that have sold so far this month, they ranged from $98 to $880 per month. However, there are many under $400, so I will use that as a safe number that still leaves you plenty of condos to choose from. In general, I find that to be a reasonable number for our local market.

Closing Costs

Closing costs include legal fees (approx $1,000), title insurance (approx $500), land transfer tax ($2,475, after a $4,000 first timer buyer’s rebate), and PST on your mortgage insurance ($1,520), for a total of $5,495. Additional closing-related expenses might be moving costs and utility deposits, as required.

Putting it All Together

In the chart below, you’ll see a complete financial breakdown of what it costs and how much income is needed to buy a local starter condo in Durham right now:

chart of what it takes to buy a condo in durham region ontario in 2024

Income Needed

As you can see in the image above, you need a minimum income of about $150,000 per year (either alone, or combined with a co-buyer) before taxes to afford a starter condo in Oshawa or the surrounding area of Durham Region in 2024. Of course, there are lots of variables, but this is a reasonable estimate. Things that would lower the required income would be a lower purchase price, a lower interest rate, or a bigger down payment. Things that would require a higher income to afford the same thing would be a higher interest rate, or carrying debt or other financial obligations.

Tip: to play around with your own numbers, use my affordability calculator.

Hacks for Housing Affordability

A gross income of $150,000 is a high bar to reach for many first-time buyers in 2024. If you don’t have this kind of income and are still striving for home ownership, consider the following strategies:

  • Buy your first home with someone else. A spouse (the legally married kind) is the best option. If you buy with someone other than your spouse, there are additional legal considerations that you should speak with your lawyer about.
  • Ask if your parents can help with your down payment. Roughly a third of first time young adult buyers are now doing it this way.
  • Save up a bigger down payment before buying. Some people are fortunate enough to live with their family to reach their goals even more quickly.
  • Buy in a cheaper area.
  • Buy a property and rent out part of it. Your lender can count part of the potential rent as income toward your mortgage qualification.

In conclusion, you now have a good idea of what it takes to afford a starter condo in our current local market, and you have some alternative options to consider if you’re not quite ready yet. If you’d like further information unique to your situation, or if you’d like me to connect you to one of my mortgage referral partners for a pre-approval, please message me, using the contact form below.

Les Lamb

About Les

I'm your hard-working, full-time REALTOR©, serving in and around Durham Region, Ontario. I specialize in client care and communications. My client-centered approach puts you first and takes the stress out of your home buying and selling experience. How can I help you?

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