I'd be interested to see the math on how two people working minimum wage could even afford a condo in the GTA let alone a house.
The real problem is nothing is affordable anymore. It used to be renting was the cheap option. Now rentals have been increases exponentially the last few years. Having to move from a rental can mean financial ruin for a lot of people. Good luck saving for a down payment when a bachelor in a 1970s building starts at $1700.
2 people making minimum wage would make 3875/mo after tax. You could definitely afford a condo, or a house if you move out of Toronto. But it's still stretching a little too thin for my liking. They'd be spending over half their salary on the mortgage.
I've had this crazy fantasy in my head for a while now of living the life of a nomad,
doing it either vanlife style or some sort of an RV, and being able to tag along a motorcycle with it.
2 people making minimum wage would make 3875/mo after tax. You could definitely afford a condo, or a house if you move out of Toronto. But it's still stretching a little too thin for my liking. They'd be spending over half their salary on the mortgage.
I dont think so. In Barrie 3 bedroom towns on my street are breaking 500k. With a car payment insurance etc two people on minimum wage can't afford to buy here either. Likely never manage to save the downstroke.
Recent report shows that it takes over $18 x2 incomes to barely get by. Barrie also has some of the highest rental rates in Canada.
If 50% of salary is going to service the mortgage, is a lender going to approve that? (probably somebody, but yikes)
We all have to sacrifice to get where we want, some didn't travel for a decade, or eat dinner out. Parked motorcyckles when kids came. Worked holidays and weekends. I didnt buy my first yacht till I was nearly 40.
Had dinner with my dad yesterday(68 years old, house in etobicoke paid off) and brought up this subject. He emphatically believed it is much more difficult to own a house these days then when he bought in the 80s and 90s. He did however admit it could potentially be more viable with dual income much more a thing.
He also told me his first 1 bedroom apartment in toronto cost $115/month for rent and how all his friends wondered how on earth he was willing to pay that much. lol.
I dunno it seems pretty crazy that average people with average income "have" to buy a home worth 1 million (or close to it) because the market it so crazy here. Never mind the rest of the expenses to go with it and other life needs. If they have this kind of money or can save the million why not just pack up and move to someplace else with more reasonable cost of living and sun! I guess one can dream.
My Inlaws bought and paid off a townhouse, sold that and bought a semi and bought half a cottage before they were 30. Accountant and teacher so not minimum wage, but far from baller status. I dont think that is possible now in the gta without being well above the median income (like multiples of it).
From my perspective, all of this post-secondary education that people are expected to complete is also having an effect. You not only have more debt, you are starting much later and missed many years of income. Also, your window to start a family is smaller, so you don't get nearly as much time to hammer the mortgage prior to kids/daycare hammering your finances. We did five years of hammering prior to kids and managed to get 20% paid a few years. After kids, pretty much back to making the payments.
We bought our first 1000 sq ft house 9 years ago in the burbs (smallest house in a nice neighbourhood). Sold it for more than double late last year. If we sold it during the madness of the spring before, it would have been ~200k more. Bought a bigger house much further out. Planning on staying here 20+ years. Mortgage is bigger than I want (but still much smaller than I hear of some taking). My initial plan was keeping moving up houses ~200K at a time so the mortgage was never a problem, but the transactional cost and effort meant that plan was no longer viable. Because it was a home and not just an investment, we also missed out on the peak (which was easy to see coming). Many downsides to home as an investment, but it is the right path for us. I added a deck that we loved that would never have been possible on a rental (way way too much money in it, no landlord would ever have foot the bill and neither would any tenant).
A friend rented in TO for the last decade or more (same apartment in a triplex). Landlord decided to sell and most likely it is going to a developer. He just bought his first house on a 25' lot for 1.6. Holy friggin hell. He is smart and obviously has been investing wisely along the way to be able to do that. That house has two broken A/C's and a boiler that is pretty much done fer so he's not done with the outlay yet.
I've had this crazy fantasy in my head for a while now of living the life of a nomad,
doing it either vanlife style or some sort of an RV, and being able to tag along a motorcycle with it.
When I bought my last house, the sellers took all the money and bought a lakeside seniors condo in Bobcaygeon and a giant RV. They planned to be on the road Sep to May as nomads.
I dunno it seems pretty crazy that average people with average income "have" to buy a home worth 1 million (or close to it) because the market it so crazy here. Never mind the rest of the expenses to go with it and other life needs. If they have this kind of money or can save the million why not just pack up and move to someplace else with more reasonable cost of living and sun! I guess one can dream.
Part of the problem of the property ponzi scheme. When we sold our starter house for way more than I could imagine, it made sense to spend a crazy amount of money for the next house. We really wanted more space and adding a little money didn't get you much more house. We are in it for the long term, so short-term corrections don't matter. We get to enjoy this place for now. When the kids are done high school, we will re-evaluate. At that time, I could see moving somewhere to free up some property cash to put it into more liquid investments.
FWIW, I am still shocked at the amount of money you can get approved for easily. Our first house we used about 30% of our approved amount (which was based on one income as my wife was on contract so I didn't want to deal with the hassle of trying to argue that her income was secure as she could get a new job next week for the same money). This house we were approved for a few hundred thousand more than we used (again, basically approved on one income to make life simpler) and we were told that we could probably get a few hundred thousand more than that if we fought for it. what the ever loving hell. Do people realize how long it takes to pay off that much money? Jeebus.
Had dinner with my dad yesterday(68 years old, house in etobicoke paid off) and brought up this subject. He emphatically believed it is much more difficult to own a house these days then when he bought in the 80s and 90s. He did however admit it could potentially be more viable with dual income much more a thing.
He also told me his first 1 bedroom apartment in toronto cost $115/month for rent and how all his friends wondered how on earth he was willing to pay that much. lol.
If your dad is 68, he probably got his first apartment in 1969. Back then...
- Men left home at 18, friends, family and even employers took a dim view of men who lived with parents.
- If you were planning a family, you got started between 18 and 25.
- Minimum wage was $1.30/hr, my mom made $2.45 as a secretary at IBM, my dad was a production manager at a GE lightbulb plant, he made $4.25/hr
If your dad is 68, he probably got his first apartment in 1969. Back then...
- Men left home at 18, friends, family and even employers took a dim view of men who lived with parents.
- If you were planning a family, you got started between 18 and 25.
- Minimum wage was $1.30/hr, my mom made $2.45 as a secretary at IBM, my dad was a production manager at a GE lightbulb plant, he made $4.25/hr
My Inlaws bought and paid off a townhouse, sold that and bought a semi and bought half a cottage before they were 30. Accountant and teacher so not minimum wage, but far from baller status. I dont think that is possible now in the gta without being well above the median income (like multiples of it).
Today is very messed up. I know lots of teachers who have side gigs on the weekends, and summer jobs (ouside of teaching). I've met lots of younger people (family types) as well who also have second jobs+full time. It used to be before you could have mostly everything on 1 income. My parents did it. My mom only worked very little when we were kids, then returned back to work only when we were teenagers. Today the norm has become dual incomes. I guess the norm will become 2 incomes, with second job. Sad reality.
There’s been a few comments in this thread about just moving to where the cost of living is lower. I think a big problem is that for the vast majority of careers you need to be in the GTA.
Well paying job / career – need to work in Toronto/GTA
Want to own any sort of affordable property – need to live outside of Toronto/GTA
What you end up with is a bunch of people trapped in the GTA. Unless you’re going to give up the career path you paid $40k+ in education and take up nickel mining you need to be within an hour of the city. Combine that with the tens of thousands of new people moving to Canada and never leaving the GTA it’s no wonder there is so much demand.
It doesn’t help that the government seems to be doing nothing to address the housing shortages. For whatever reason the only types of new housing that get built are micro-condos or multi million dollar teardown homes. The fact that there is single detached homes in walking distance to subway stations is laughable. All of Rosedale, Summerhill, Forest Hill, etc. should be rezoned + redeveloped into low-rise buildings before they shove anymore people into 250sq.ft condos. Only in Toronto will you find a 20+ story condo beside a bungalow.
There’s been a few comments in this thread about just moving to where the cost of living is lower. I think a big problem is that for the vast majority of careers you need to be in the GTA.
Well paying job / career – need to work in Toronto/GTA
Want to own any sort of affordable property – need to live outside of Toronto/GTA
What you end up with is a bunch of people trapped in the GTA. Unless you’re going to give up the career path you paid $40k+ in education and take up nickel mining you need to be within an hour of the city. Combine that with the tens of thousands of new people moving to Canada and never leaving the GTA it’s no wonder there is so much demand.
It doesn’t help that the government seems to be doing nothing to address the housing shortages. For whatever reason the only types of new housing that get built are micro-condos or multi million dollar teardown homes. The fact that there is single detached homes in walking distance to subway stations is laughable. All of Rosedale, Summerhill, Forest Hill, etc. should be rezoned + redeveloped into low-rise buildings before they shove anymore people into 250sq.ft condos. Only in Toronto will you find a 20+ story condo beside a bungalow.
They won't be creating more land, so the laws of supply and demand suggest prices will continue to rise with demand. That means your bungalow goes up in value OR it gets divided up into multiple lower cost units.
Nobody is trapped in the GTA. Toronto is a desirable place to live -- far more desirable than most Canadian cities -- that's why it's so big and so expensive. I concede that not everywhere has every occupation, but if you give me a job title I'll tell you where you can live cheaper while earning a similar paycheque.
One of my kids just grappled with this. He had a relo opportunity to a small city in NB where he could buy a 2000sq' oceanfront home on 2 acres, 5 minutes from town for $265K. Or, he could buy a downtown home that would cost $2M in Toronto for about $150K. He chose to stay in the GTA, probably for the same reason a few million call this area home.
They won't be creating more land, so the laws of supply and demand suggest prices will continue to rise with demand. That means your bungalow goes up in value OR it gets divided up into multiple lower cost units.
Nobody is trapped in the GTA. Toronto is a desirable place to live -- far more desirable than most Canadian cities -- that's why it's so big and so expensive. I concede that not everywhere has every occupation, but if you give me a job title I'll tell you where you can live cheaper while earning a similar paycheque.
One of my kids just grappled with this. He had a relo opportunity to a small city in NB where he could buy a 2000sq' oceanfront home on 2 acres, 5 minutes from town for $265K. Or, he could buy a downtown home that would cost $2M in Toronto for about $150K. He chose to stay in the GTA, probably for the same reason a few million call this area home.
Construction costs have also gone crazy. 12 framed townhouses burned to the ground and three neighbouring houses were damaged in Barrie recently. Damage is estimated at $2,000,000. Obviously that is just construction costs not land value.
Even just looking at construction costs and development charges (pushing 100K in some municipalities), buying houses is approaching unaffordable for many.
I dunno it seems pretty crazy that average people with average income "have" to buy a home worth 1 million (or close to it) because the market it so crazy here. Never mind the rest of the expenses to go with it and other life needs. If they have this kind of money or can save the million why not just pack up and move to someplace else with more reasonable cost of living and sun! I guess one can dream.
Agreed...it's nuts that a regular home costs close to $1M in the GTA! We have been looking recently and basically are struggling with that decision. Going from a 3bdr to a 4bdrm of 3+1/2 is definitely an upgrade but at what cost. I'm trying to keep it under $1m (closer to 900k would be much better) but for what you get in the lower range it's not worth making the move IMHO.
We will keep looking but I really wish I bit that bullet 3 years ago and struggled for a while. We bought something we can afford on a single income...and it's worked for us. But didn't expect to have an extra mouth to feed at this stage in my life (MIL not baby!).
Agreed...it's nuts that a regular home costs close to $1M in the GTA! We have been looking recently and basically are struggling with that decision. Going from a 3bdr to a 4bdrm of 3+1/2 is definitely an upgrade but at what cost. I'm trying to keep it under $1m (closer to 900k would be much better) but for what you get in the lower range it's not worth making the move IMHO.
We will keep looking but I really wish I bit that bullet 3 years ago and struggled for a while. We bought something we can afford on a single income...and it's worked for us. But didn't expect to have an extra mouth to feed at this stage in my life (MIL not baby!).
When we were looking for new houses, we tried to find something with a reasonable area for aging parents to live if required but we had no luck. Either they had a normal guest bedroom (which we ended up with) or they had a ridiculous 1000 sq ft+ inlaw suite and little room for the kids to play. Honestly, who needs a dining room seating 8 or 10 in the inlaw suite? Most of the time they would be with us and a breakfast area with table should be more than sufficient for inviting a couple people over if they want privacy. Ideally the guest bedroom would have been on the main floor, but more often than not, that would mean the kids would be pushed to the basement which I didn't really want. Who knows, maybe I'll just build the next house so I can get what I want and crap ass builders won't screw it up but sadly by then I won't have in-laws to accommodate.
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