Blind bidding auctions have no impact without the supply and demand imbalance: Scotiabank's Perrault
Drew Roberts couldn’t wait to get out of Toronto.
After he and his girlfriend managed to find work in Kingston, Ont. they found the same problem: even 260 kilometres to the east, the dream of home ownership was still out of reach.
“We left Toronto in search of a more stable career in our respective fields,” said Roberts, a 32-year-old scientist. “We wanted a city with a slower pace in which we could grow our roots.”
When planning to make the move in spring of 2021, Roberts said he kept an eye on the local real estate market, but said prices had already swelled beyond their budget so they instead moved into a rental.
While not a home owner yet, Roberts said in Kingston he has a three bedroom home with a two-car garage, for about the same price as his two bedroom apartment in the northeast corner of Toronto.
“Homes are selling way over asking,” he said. “So when you feel like you have your financials in order and worked out a budget, you still need to be ready to pay 20 per cent over the listed price just to have your offer considered.”
It’s a common problem among his cohort. As of July, the average price for a home in the Greater Toronto Area was $1,062,256, according to the Toronto Regional Real Estate Board (TRREB), a 12 per cent increase from just one year ago. To come up with a 20 per cent down payment on such a home, one would need to have saved roughly $212,000.
I GET BY WITH A LITTLE HELP…
In fact, it seems just about the only millennials who do own a home even remotely close to the provincial capital have had assistance from their family.
“I would say 95 per cent of my friends who do own homes have had assistance from their parents,” said Kristina Russo, a 28-year-old commercial property manager. “And those who didn’t get any help are moving way outside of the GTA.”
Russo managed to purchase a home in Woodbridge, Ont. back in 2018, thanks to a windfall inheritance, but admits without that lifeline, ownership never would have been in the cards.
“For myself it was crucial. I was working two jobs, starting my career at an entry-level position. So I wasn’t making a ton of money where I could support myself and save a substantial amount for a down payment at the same time.”
Russo said when talking to her peers about the housing situation in this country, the frustration is palpable.
“It doesn’t seam realistic like it was for our parents when they were our age,” she said. “We were raised in those kind of homes, so we’re confused as to why we can’t achieve what our parents achieved.”
WEST IS BEST?
Thirty-one-year-old high school teacher Chris Birrell didn’t need help from the bank of mom and dad to purchase his first home, but he did have to move as far west as Edmonton.
“We shopped around and we were pretty blown away with what was affordable to us,” said Birrell. “We were like ‘we can actually have this? This house is really nice. It’s almost too big.’”
“It’s insane how much my friends back home [in Toronto] are paying for fixer-uppers. Seeing what that price can get you in Edmonton is crazy.”
According to July data from the region's real estate board, the average home price in Edmonton was just over $366,000, virtually unchanged from selling prices even 15 years ago, as it would appear that provincial capital has been immune to the pandemic price increases many other Canadian markets have seen.
While aware housing affordability is a hot issue on the campaign trail, Birrell said purchasing a home is a completely different process in Wild Rose Country.
“I don’t know anybody that rents. Everyone I know out here owns a house,” he said. “If you want one you can pretty much just go and get one.”
“People who are single are usually the ones renting, and maybe taking some more time to save, but for dual incomes, I would say Edmonton is quite affordable. There is very little competition.”
EVEN OUT EAST?
Even for prospective buyers on Canada's east coast, frustration is bubbling over.
“I've put my plans to purchase a home on hold for the time being after being disappointed several times,” said Chelsea Seaman, a marketing professional based out of Halifax.
“Going in over asking by over $50,000 with no conditions and still not even coming close to the first offer is discouraging to say the least. What's even more disturbing is seeing the place you wanted to purchase on Kijiji for rent a few weeks later.”
WHAT DO THEY NEED?
While they are not experts on the real estate market or housing policy, the aforementioned millennials were given a chance to opine on the issue of affordability, and what they’re looking for ahead of the federal election.
To see where each federal party stands on the topic of housing and other pocketbook issues, refer to BNN Bloomberg's election tracker here.
Drew Roberts, 32, scientist, Kingston, Ont.
“Trudeau has mentioned in his campaign that they will help first-time homebuyers, but has been making this promise since 2015. I personally think the government should be taxing foreign investors that buy up the market and rent houses back to our population at an inflated rate.”
“Additionally, homes are being purchased by individuals or families who already own, and have the intention of using as a rental property.”
Chris Birrell, 31, high school teacher, Edmonton
“I think it’s the most important topic this federal election. Something needs to be done. There can’t be empty promises anymore.”
“As a Canadian and someone who wants the best for his community and for everyone, I think houses should be more affordable, the opportunities I got here should be available for everyone anywhere. You shouldn’t have to uproot your whole life just to own the roof over your head.”
Kristina Russo, 28, commercial property manager, Woodbridge, Ont.
“I don’t think eliminating or making the process harder for foreign buyers is going to help the situation because the percentage [of foreign ownership is so low].”
“Maybe reducing interest rates even lower, or compensation for first-time homebuyers would help. We need more of a helping hand from the government, an incentive to be given out so more millennials can purchase their first home without such a heavy burden of the 20 per cent down payment.”
Chelsea Seaman, 26, marketing professional, Halifax
“I will say that it doesn't feel right that someone can purchase a house in HRM (Halifax Regional Municipality) without even viewing it, only to list it for rent later. How will locals living in the HRM economy overcome this?”
“Some friends are scared if they don't buy now then they never will be able to.”