Montreal, Quebec
Erik and his wife have been living in an apartment building in Montreal for more than five years. Having originally moved closer to downtown for work, the couple now feels the draw of the suburbs, especially if they want to start a family.
“Our goal is to buy a home, and we've gotten as far as working with a broker on a mortgage pre-approval," Erik says. “But, I have to admit it feels a little hopeless watching housing prices skyrocket in and around Montreal."
The couple's first step towards homeownership was getting their financial house in order. “We had some debts from our wedding in 2019 and we've prioritized paying those off by consolidating our credit card debts into a loan. We also accelerated paying off a car loan, so that's one less monthly bill to worry about."
They've also expanded their search beyond off-island suburbs, to the Laurentians and Eastern Townships. “It takes time and energy, but one by one we've had friends eventually find homes that work for them."
You've seen it at the grocery store and at the gas pump — things are more expensive than ever. According to Statistics Canada, inflation recently surpassed eight per cent for the first time in almost 40 years.
The impact of this inflation means your paycheque isn't going to stretch like it used to. That's especially troublesome for the country's prospective homebuyers. Along with that decrease in purchasing power, first-time buyers have watched home prices surge and interest rates rise.
Home affordability has worsened at the fastest pace in more than 26 years, the National Bank of Canada's Housing Affordability Monitor found at the beginning of 2022. The report says it would take nearly half of a household's annual income to service the monthly mortgage payment for the median home price.
So, how can renters expect to finally break into the housing market?
Here's a snapshot of what it takes to purchase a home in some of Canada's biggest cities, and the strategies of a few prospective buyers hoping to one day achieve their dream of home ownership.
Home prices and income needed are from the Housing Affordability Monitor and median household income stats from Statscan.
1,800,000
$70,300
Hopeful homeowner perspective:
Price of a representative home in the metro market:
Median household income:
Population:
Household annual income needed to afford that home:
$108,731 (non-condo)
$75,532 (condo)
$535,034 (non-condo)
$370,392 (condo)
$1,234,597 (non-condo)
$682,111 (condo)
Marsha lives in a $2,000-per-month, one-bedroom condo in downtown Toronto. Growing up in a small town where everybody had their own yard, she says she's hopeful to buy a home one day to recapture all that living space.
“You just can't get the same space in a rental property. And since the pandemic, the small space makes you feel even more isolated."
She says she's frustrated that home ownership is out of reach for so many. “I think that 40 years ago, people who had stable middle-income jobs could get a house. I worked hard to get the job I have, and now the fact that I can't even afford to buy a house with my salary makes me angry."
Marsha says she would consider moving to a cooler housing market, acknowledging that it would be a place that has less resources and is less diverse — things that drew her to Toronto in the first place.
But she hasn't given up on buying in Toronto completely, and is starting to take steps to get her finances in order. The first is cutting down on things like takeout food and other small expenses that have become habits. She's also begun making more RSP contributions, taking advantage of tax reductions while keeping open the option of using the Home Buyers' Plan.
$81,700
Hopeful homeowner perspective:
2,800,000
Price of a representative home in the metro market:
$212,013 (non-condo)
$137,145 (condo)
Population:
Household annual income needed to afford that home:
Median household income:
Toronto, Ontario
$383,220 (non-condo)
$232,595 (condo)
$73,900
830,000
Price of a representative home in the metro market:
$78,148 (non-condo)
$47,432 (condo)
Population:
Household annual income needed to afford that home:
Median household income:
Winnipeg, Manitoba
$522,003 (non-condo)
$245,432 (condo)
$87,300
1,300,000
Price of a representative home in the metro market:
$106,213 (condo)
$50,050 (condo)
Population:
Household annual income needed to afford that home:
Median household income:
Calgary, Alberta
$652,322 (non-condo)
$379,013 (condo)
$84,400
1,000,000
Price of a representative home in the metro market:
$131,390 (non-condo)
$77,290 (condo)
Population:
Household annual income needed to afford that home:
Median household income:
Ottawa, Ontario
$1,572,237 (non-condo)
$683,650 (condo)
For the past year, Nancy and Steve have lived in a $1,650-per-month, 750-square-foot apartment in East Vancouver.
“Our goal is to buy a home," Nancy says. “It would be important for us to invest in the real estate market in order to build wealth."
Home prices in Vancouver climbed 15 percent over the previous year, keeping its status as the least affordable city among Canada's urban markets. Seeing the housing stats makes it harder to imagine owning a home, Nancy says. “Our thoughts regarding home ownership don't necessarily start at the level of owning a $1.5 million property. But even at the lower end of the market, we hear stories of bidding wars and have friends who feel resigned to renting."
Because Nancy and Steve are both self-employed, they feel like it will be difficult for them to get approved for a mortgage. Their strategy is to try to save and offer a larger down payment, improve their credit score and even create more income streams, knowing that lenders will want to see a longer period of steady income for self-employed borrowers.
$79,100
Hopeful homeowner perspective:
660,000
Price of a representative home in the metro market:
$269,994 (non-condo)
$137,442 (condo)
Population:
Household annual income needed to afford that home:
Median household income:
Vancouver, British Columbia
$438,807 (non-condo)
$224,521 (condo)
$95,500
1,000,000
Price of a representative home in the metro market:
$89,484 (non-condo)
$45,785 (condo)
Population:
Household annual income needed to afford that home:
Median household income:
Edmonton, Alberta
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