London is still Ontario's second most affordable city, despite housing frenzy

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Despite an average selling price that has soared to $572,000, Windsor holds the No. 1 spot in the province as the most affordable larger city in which to own a home.

London came a close second in the latest study, released Thursday by Zolo that describes itself as Canada’s leading online real estate marketplace.

The study used the average sale price in Windsor for the month of March — a whopping $534,000, about 49 per cent higher than March of 2020 — and factored in data such as average income, unemployment rate and population growth to come up with a score out of 100. The closer a city is to 100, the better its affordability. Windsor’s score was 98.6, best among larger cities. London was second most affordable with a score of 97.5, followed by Barrie with 97.1, Kanata with 96.9 and Guelph with 96.2.

“Windsor is an ideal spot to raise a family in a mid-size town that has all of the amenities of the big city, plus access to cross-border shopping,” says the report’s Windsor profile.

The latest data from the Windsor-Essex County Association of Realtors shows Windsor’s average monthly selling price has risen significantly from March, when its data showed an average sale price of $531,000. Average selling price is determined by the number and desirability of homes listed for sale which sold in that month. Zolo uses its own proprietary algorithm to determine average prices.

According to the realtors’ association, Windsor’s April average selling price jumped to  $572,000, up 60.5 per cent from April 2020 (a month when prices slightly sagged with the arrival of the pandemic).

“As residents of Windsor, when we see prices rise like this, it’s eye-opening when people from outside our area say ‘Hey, you guys are affordable,'” the association’s president Damon Winney said in response to the Zolo study.

Prices are rising everywhere, he said.

“If it’s all in lockstep. If we were affordable a year ago, or two or 10 years ago, if everybody’s boats are floating on the same ocean, then we remain ‘affordable.'”

But affordable is a relative term, he said, citing the many first-time buyers struggling to get into the local market due to high sale prices and competing bids for a lower-than-normal inventory of available homes.

“I mean that ($572,000) is a big number for Windsor.”

Windsor’s No. 1 ranking is based largely on its home-price-to-income ratio, which takes the average house price and divides it by average income (single income and household income). Windsor has the lowest average house price and an average income that’s middle of the pack, meaning Windsor’s ratio of 8.34 years for a single income is much lower than any other city, including London at 9.49 years. Windsor’s ratio based on household income is even lower at 6.45 years.

“A great place if you’re single or a relatively new family trying to break into the market, Windsor is a great place to make that jump,” the report’s author Romana King said Thursday, adding Windsor ranked No. 1 because it has a lot going for it in terms of lower house prices and relatively high average income.

This kind of data can be used to attract new employers looking for a good workforce, as well as people who want to move to a place where they can land a good job and afford to buy a home, she said.

“You have an advantage. You’re a mid-size or larger city that allows families to grow and earn a good living and become homeowners, establish roots and settle down. I think that’s a really strong advantage for the city of Windsor.”

In the Top 10 list of Ontario’s most affordable large cities, Windsor had the cheapest average home price at $531,000, with London the only city that was even close at $578,000. The rest ranged from Barrie at $713,00 to Waterloo at $863,000.

Among middle-sized cities, Sarnia ranked No. 1 for affordability. Though its average house price of $358,000 was much more than No. 2 Thunder Bay’s ($299,000), its high average household income of $91,592 gave it a home-price-to-income ratio of just 3.91 years.

The small city category’s Top 10 list was made up mostly of Northern Ontario towns, whose low house prices (as little as $101,431) helped several of them achieve ratios below two years.

bcross@postmedia.com