Connect with us

Lifestyle

Owning a home increasingly a pipe dream for house hunters in Toronto, Vancouver

Published

on

ShutterStock image

ShutterStock image

OTTAWA—Lyndall Schumann and her husband have been living frugally and saving since finishing their undergraduate degrees.

But even with a hefty downpayment, buying their three-bedroom semi-detached house in Toronto earlier this year required a bit of good fortune.

“We got lucky because it was an estate sale and it was a family that had been here for 50 years, and they kind of wanted it to go to another family,” Schumann said in an interview.

Unlike many house sales in Toronto, she added, her house “didn’t go for a crazy amount over the asking price.” The home was listed for $800,000, but Schumann declined to say how much more they paid.

Until the graduate student completes her training to become a psychologist in two years, Schumann acknowledges the family budget will be strained.

“Especially with daycare, it is a stretch,” Schumann said, noting that her one-year-old son will start in the fall when she begins a residency program.

Soaring home prices in Toronto and Vancouver are testing levels of affordability not seen since the early 1990s, when the country was in a recession and mortgage rates were north of 10 per cent.

online pharmacy buy zydena with best prices today in the USA

“In Toronto, we’re not as bad as 1990, but we’re not that far from it either,” said Robert Hogue, senior economist at the Royal Bank.

In Toronto, home ownership costs—including mortgage payments, utilities and property taxes—for a single detached home were 71.4 per cent of the median household income. The average for the city since 1985 is 55.5 per cent, according to Royal Bank.

Hogue notes that home ownership in Vancouver has always been an expensive proposition, but prices in recent months go “well beyond” what can be explained by a relatively robust local economy.

“Vancouver, I think I would say, is in a different league,” he said. “It is probably among a select group of global cities where home prices are not connected to the local economic fundamentals.”

RBC’s measure of affordability put the cost of a single detached house in Vancouver at 109 per cent of the median income in the fourth quarter of last year, meaning the costs are more than a typical household’s pre-tax income. Essentially, that means owning a detached home in the city is all but impossible for most people.

online pharmacy buy zofran with best prices today in the USA

In markets outside Vancouver and Toronto, home ownership remains within reach for the average household. Low interest rates have helped offset the rise in home prices in smaller cities across the country and kept monthly mortgage payments in check.

Outside of the two hottest markets, RBC’s affordability measure is generally close to the historical average, and recent trends have been either stable or improving slightly.

In Ottawa, home ownership costs for a single-family detached home in the fourth quarter took up 36.5 per cent of a typical household’s pre-tax income. In Calgary, it was 38.3 per cent; in Montreal, it was 42.8 per cent.

But Hogue notes that climbing house prices, even in markets outside Vancouver and Toronto, have outpaced gains in income in recent decades, making it more difficult for first-time buyers to come up with a downpayment.

Schumann knows she and her husband got lucky in Toronto. Similar houses just down the street have sold for more than $1 million.

“Even though it was in a good area, there were just certain things about it that made it … not as tempting for other buyers,” she said of her house. “We’re living with things we can live with, and anything that absolutely needs to be fixed, we’re doing as it needs to be done.”

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Maria in Vancouver

Lifestyle12 hours ago

Nobody Wants This…IRL (In Real Life)

Just like everyone else who’s binged on Netflix series, “Nobody Wants This” — a romcom about a newly single rabbi...

Lifestyle1 week ago

Family Estrangement: Why It’s Okay

Family estrangement is the absence of a previously long-standing relationship between family members via emotional or physical distancing to the...

Lifestyle2 months ago

Becoming Your Best Version

By Matter Laurel-Zalko As a woman, I’m constantly evolving. I’m constantly changing towards my better version each year. Actually, I’m...

Lifestyle2 months ago

The True Power of Manifestation

I truly believe in the power of our imagination and that what we believe in our lives is an actual...

Maria in Vancouver3 months ago

DECORATE YOUR HOME 101

By Matte Laurel-Zalko Our home interiors are an insight into our brains and our hearts. It is our own collaboration...

Maria in Vancouver3 months ago

Guide to Planning a Wedding in 2 Months

By Matte Laurel-Zalko Are you recently engaged and find yourself in a bit of a pickle because you and your...

Maria in Vancouver4 months ago

Staying Cool and Stylish this Summer

By Matte Laurel-Zalko I couldn’t agree more when the great late Ella Fitzgerald sang “Summertime and the livin’ is easy.”...

Maria in Vancouver4 months ago

Ageing Gratefully and Joyfully

My 56th trip around the sun is just around the corner! Whew. Wow. Admittedly, I used to be afraid of...

Maria in Vancouver5 months ago

My Love Affair With Pearls

On March 18, 2023, my article, The Power of Pearls was published. In that article, I wrote about the history...

Maria in Vancouver6 months ago

7 Creative Ways to Propose!

Sometime in April 2022, my significant other gave me a heads up: he will be proposing to me on May...