Who is Buying Up All the Homes in Toronto?

One common question in the Toronto real estate market is: Who exactly is buying homes right now? Who can afford these high prices and interest rates? And how much do they actually need to earn to purchase a home?

This blog aims to answer these questions based on insights from the latest Ratehub report and on-the-ground experiences of real estate professionals working with many buyers across the GTA market.

The Current State of the Toronto Real Estate Market

Toronto and GTA home prices have declined since their all-time peak in February 2022. Although prices haven’t returned to those peaks, they remain significantly high. Combined with increased interest rates and higher borrowing costs, affordability hasn’t improved much. This context is crucial to understanding who is buying these homes and what kind of income is necessary to afford them.

How Much Do You Need to Earn?

Let’s start with the numbers from the Ratehub report, which provides a clear picture of the earnings required to purchase a home in Toronto under current market conditions.

According to the report, as of January 2024, the average sold price across all property types in Toronto was $1,165,000. Given an assumed 5.7% interest rate and a stress test rate of 7.77%, you need to earn approximately $210,000 annually to afford a home with a 20% down payment. By February 2024, as the average sold price increased to $1,193,000, the required annual income rose to $214,000.

The report’s assumptions include a 25-year amortization period, $4,000 in property taxes, and $150 per month in heating bills. These numbers do not account for maintenance fees, particularly relevant for condos where heating might be included.

Interest Rates and Their Impact

The Ratehub report assumes a 5.6% mortgage interest rate, slightly higher than what many buyers are currently seeing, which is around 5.2% to 5.3% for a three-year fixed mortgage. Even with these slight variations, the required income to afford a home in Toronto remains substantial.

Who is Buying These Homes?

Based on real estate professionals’ experiences, the majority of buyers in Toronto fall into two primary categories: individuals working in tech and older individuals nearing retirement with significant liquidity.

Tech Professionals: Many clients work in tech fields such as cybersecurity, software development, cloud computing, or project management within tech companies. These high-earning individuals can meet the financial requirements needed to purchase homes in the current market.

Older Individuals (50-60+ Years): Another significant group includes older buyers, typically 50 to 60 years old, who are either near retirement or already retired. They often have substantial cash reserves or liquidity, allowing them to make purchases without relying heavily on financing.

Trends and Common Themes

In 2023, out of over 15 purchase transactions facilitated by real estate professionals, approximately 90% of the buyers were either tech professionals or older individuals with considerable cash reserves. The remaining buyers were fewer and more varied, but these two groups were the dominant force in the market.

Affordability Challenges

Despite declining home prices since the 2022 peak, affordability has not increased due to higher mortgage rates and other living costs.

The conventional wisdom suggests that it doesn’t matter if you’re buying in a low-price market with a high interest rate or a high-price market with a low interest rate—your monthly payment might be similar.

However, buying in a higher interest rate market with lower home prices is generally better in the long run. Here’s why:

Lower Purchase Price: Buying at a lower purchase price means less debt, even if the interest rate is higher. Once interest rates decrease, you can refinance to a lower rate, reducing your monthly payments significantly.

Future Value: Homes bought at lower prices during high-interest rate periods tend to appreciate over time. This can provide better returns when the market recovers and interest rates normalize.


The Toronto real estate market is currently driven by high-earning tech professionals and older individuals with significant liquidity. Affording a home requires substantial income, and while interest rates play a critical role in monthly affordability, the long-term benefits of lower purchase prices should not be overlooked.

Understanding who is buying homes and the financial requirements involved can provide valuable insights for prospective buyers and sellers. If you have any questions or need further assistance, feel free to reach out. The Toronto real estate market is complex, but with the right information and support, navigating it can be much more manageable.