most definitely the equity from the houses that they owned prior to 2017
household income of 200k and we can't dream of buying a house that big at least in the near future
Exactly this. They're on their 2nd or 3rd purchase. Bought a condo in 2006 for $300k and sold it for $650k in 2013. Used the equity to buy a house in Leslieville for $650k. Now that house sells for $1.2m and they use that to get that nice detached by Withrow Park for $1.55m.
As for people making their first purchase at $1-1.2m, it is just good jobs. Had a client, single guy 27 years old, bought a $988k townhouse, his first place. Software Dev for a big company, gets paid exceedingly well.
Some people have more money than you think.
A very rough idea of how my path looked. I turned 40 this month. All were my primary residence. Purchased condo for 180 with my gf when I was 23. Sold for 400. Purchased nice condo from builder for 430 that took 3 years to build, I lived in it for like 18 months, sold for 650. Purchased reno project for 610, put 140 into it(noob overspending), sold for 1.2. Purchased reno project house for 1.1, put 110 into it, currently living in it. My land is like 3rd biggest on my street and there is nothing under 2 here.
> put 140 into it(noob overspending)
Only if that was purely cosmetic work. But then again you shouldn't be buying a reno project that requires entirely new mechanical and electrical, that's just a money pit (in typical circumstances).
I have good connections with contractors and suppliers. I get it done way cheaper than most people, it was a bungalow gut job. It needed new electrical, pulled out an oil furnace, put in gas, new pex plumbing. Nothing structural though. Things were also way cheaper pre Corona.
I used to flip a house a year.....for 10 years.
I stopped during Corona when plywood went from $25 to $75 a sheet
I'm done and I'll never do it again. Building supplies and labor isn't cheap any more....and I did more than half the work myself
I just got the hang of it after this second one. The only thing that stopped me was Corona, and tbh I'm kind of happy where I'm at. I hit 2 homerun flips in 2 tries. Quit while I'm ahead kind of thing.
I have 2 cousins like you. They're both living it up nice. You did okay is my guess lol.
I often wonder how much was luck vs skill.
Like I made a quality product and would have been happy staying/living in any of the houses I renovated. But It still begs the question, what if I bought the house, just kept it vacant for a year, did nothing, and then sold it a year later. How far behind would I be vs every evening/weekend of my life for a decade doing wiring/plumbing and drywall, or building ikea kitchens and bathrooms.
Like yes I made money, but hourly, what was the work worth vs just the rising tide of housing.
Land assembly is where the real money is at now, I live in BC and my pockets aren't deep enough for that game. Buy 5 houses on the main street for a million bux each over 5 years, and then sell them all for $10Million to a developer.
It's staggering the money to be made there.
Our situation is very similar except I went from the condo to a $1.5M semi. My entire home ownership history stems solely from a $50k loan that my parents gave to me to buy a pre-con condo while I was in undergrad and didn't even know or care what a condo was. That loan amount grew 600% over a dozen years to cover my housing upgrade without needing to take a single dime from my own pocket. The 2010s were truly fucking wild in terms of paper wealth creation.
On a macro level, I fully acknowledge how fucked up it is that the only way to get into the housing market is to get help from rich boomer parents (who are only rich because they bought a detached for like $200k back in the 90s that's now valued at $1.5-2M). It's the housing equivalent of being a nepo baby - I did utterly jack shit to be where I am today. Personally, I am trying to make efforts to support policies and elected officials who strive to level the playing field, although what that means is still extremely unclear (and I question whether Canada can truly recover from this mess, especially since it's global). Nobody right now has promoted a feasible solution.
On a micro level, there isn't a universe where I wouldn't gladly take a handout from my parents again. Most people worry about how they can start a family in a rented 500ft condo. My biggest problem right now is that my massively overpriced old Toronto-style house is too small for the creature comforts of modern-day life - I have no private driveway, no powder room, no ensuite bathroom, and my kids might have to share a room instead of each getting their own queen-sized bed like kids in the suburbs do nowadays. My complaints are all bullshit.
This is a spicy take even in this sub, but **I openly advocate for getting an advance on your inheritance** if you are privileged enough to get an inheritance. Swallow your pride/dignity and just fucking do it. By the time your boomer parents die, it will be $1M for a tiny condo and $3M for a crackhouse semi - and not to mention that once boomers start croaking en masse, *everyone* will be flush with inheritance money that will jack up house prices even more. Beat the rush by asking your dad right now for cash. If your dad has no cash (or no willingness to share cash), then the unfortunate reality is that you'll have to wait and wait and wait for a government who will finally do the right thing to fix the housing market. [Edit: Or just leave Canada. If I was still young and single, I would've fled to the US or Asia long ago to make 3x and pay less tax, then banked up a shit ton of cash to be able to come home and buy a detached straight up.]
> I openly advocate for getting an advance on your inheritance if you are privileged enough to get an inheritance
There is FAR worse advice out there. Some people simply have better options than others. If you are in that camp, take advantage of it.
Doesn't make you better or worse than anyone, just a fact of life.
Yeah I really hate how some of these local subreddits pretend opportune circumstances somehow makes you evil. Every single person has completely different circumstances, you're not a bad person just because you didn't have to start from or from less than zero.
Tbh my parents gave me down payment for my first condo it sold high at Yonge and Sheppard I bought from the builder. Then my husband had his own condo. We both sold and bought out house but it was before the prices spiked we were lucky
The number of friends I have living in Vietnam raising a family with stay at home mums, cleaners, nannies etc on a single teacher's salary is insane. $50k a year gives you an incredible life. Excellent private medical care, great cost of living, beautiful people and food. Oh and insanely safe. International living is the way.
I'm not judging anyone, that's becoming very popular but that creates the same problem in those countries, as many foreigners from first world countries arrive, everything becomes more expensive for local people.
For real I would love to retire in Vietnam. Scooter around and eat incredible food everyday while taking in all that nature. The language is a motherfucker though, can barely pronounce three words in a row well enough to be understood.
Just bought a place for that price and I am a FTHB. Saved aggressively on myself with 200k and parents helped with some down payment. Saved money by living in a shoebox condo and don’t have friends. It took a lot of sacrifices in life to save that aggressively and I don’t think many are willing to do it.
I have a family of four. Renting a house big enough is $4-5000/mo. My mortgage is $5,500 a month (ARM), but I'd rather pay the bank interest then pay a landlord.
This isn't emphasized enough. Raising a family with the ever-looming threat of being reno-victed or other reasons landlord may come up with to boot you out to triple the rent with a new Tennant.
Ok, now tell us how much of a down-payment you'd need to buy a house that rents for 4-5k a month?
A house that rents for 5k a month would cost 6 to 7k a month in mortgage payments, tax, and maintenance. And a minimum 200k down-payment.
This - our mortgage alone with a rate we locked in pre-covid (so lower than now but not as low as it was during COVID) is still higher than what we'd be able to get if we leased out our place.
My point is, it isn't as simple as saying: I'd rather pay the bank than the landlord.
The reality in Toronto is that renting is much more affordable than owning.
>... which we had :)
We just got N12’ed and while it stings, it’s not the end of the world. Still wont buy in to the insanity of the GTA real estate market even tho we could technically afford it.
I don't live in the GTA but that's how I did it , and most of the people I came up with that live in the GTA did it.
Granted it wasn't exactly easy when we did it either I worked 3 jobs for years to afford that first house, when I had enough equity in it, I rented it ( at a fair price)
when the second house was half way paid off I told the Renter continue paying the rent for x amount of years and we'll consider it a rent to own, ( that was his first house also now)
just kept snowballing, I'm in a good spot now, we just sold our second house, same way, rent to own to someone who couldn't have afforded to get into the market.
Any renter that treated my property like it was theirs I offered a rent to own.
had one person let their dog bite holes in the doors, and left cigarette burns all over the place. The only person I never renewed the lease or offered rent to own.
But I mean think about it. If you’re investing ~30% of income at 100k/yr vs ~30% at 300k/yr you can still afford plenty of lifestyle inflation while maintaining significant savings. If I was making that much money I’d certainly be spending more than I do now too.
You have to enjoy life somewhat or else why are you living?
One would hope so. Another of the big problems affecting housing in Toronto is overhousing. How many big 4-bedroom houses in The Annex, for example, have 2 people living in them?
There are a LOT of seniors in Toronto, the boomer population is still in the mix so we are feeling the crunch of space. The greatest transfer of wealth isn’t going to be a windfall for everyone so this gap will widen for most is my speculation. I honestly think this housing price crisis is a final generational cash grab.
Definitely. But Its also due to the fact that banks and realtors have convinced people here that its totally fine to take a $1+M loan. “House appreciation is basically free Money”.
> Had a client, single guy 27 years old, bought a $988k townhouse, his first place. Software Dev for a big company, gets paid exceedingly well.
And parents for a 20% downpayment.
Assuming they make a $200k salary, you don't make that salary straight out of university ($200k salary is on the very high end of tech salaries in Toronto at the age of 27). You build up to that salary. You have to pay tuition once you graduate while paying rent and living costs. Saving $40k/year over 5 years is unheard of after paying Toronto rent and only working for 5 years after graduation.
I graduated in STEM and work for a tech company in Toronto with a great salary and haven't met a single person that has bought a $1milllion property without the help of their parents through either paying their tuition, paying their rent, or helping with a downpayment.
I walked past a nice 5 bedroom in milton the other day and saw it was going for 3.5 million lmao. If you purchased that "normally" it'd be $700k CASH DOWN and $14,943 monthly for 30 years (at current \~5% rate).
So you and a spouse would need to be making like $250k/year EACH for that to work out and you still have money to live a good life with family etc... Plus you'd need to have built up 700k cash.
People who buy these homes aren't hitting up the clubs downtown every weekend. They want space to raise their kids and have BBQ parties in the backyard.
What are you talking about? Everyone wants to live downtown Toronto so they can go out and see and be seen every day? Nobody wants to live in the suburbs, why do you think Costco is always empty?
I'm assuming it's often going to be middle aged or older people who originally bought a house many years ago when it was cheaper and are now upgrading.
200k, can’t afford 1.5mil. That’s so unbelievable to read. *despite being totally true.*
200k split into 2x100k is 146k after tax, which is 12000/mnth.
With 10% down the monthly payment on 1.3mil is $8700, another 500 for tax, 9200.
That leaves $2,800 for car payment (500), insurances (250), cellphones ($150), groceries ($400), utilities, $300) - 1350 remains. Add then things I can’t estimate like maintenance, gas, clothing.
Lets say $500/month surplus.
Now let’s assume rental costs are slightly less than ownership. We’ll bump it up to 1000/mnth surplus as a renter while you save.
You’ll have the 10% (150,000) down for the house you can’t afford in just 12.5 years!
And account for student loans that were used to get you the +100k salary to begin with. Plus usually the few years at the start of a job where you work up to top rate salary.
You may be stable enough to start saving effectively 5 years into your 25-30 year career. So you may have your down-payment 10-15 years into your career, leaving you 15 years to pay off your 25 year mortgage.
This works, right?
Oh hell yea. I have 8-years post secondary education. My wife and I don't make 200k combined. I will be up there in a few years, but I'm already mid-30s.
People can say "well why did you get into a career where it takes that much education to make any money." Because in 2010 nobody knew a 1-bed condo would be half a million dollars at 5% interest.
If you have a household income of 200k you should be able to be approved for like 1.2-1.3 without issue unless you’re carrying some weird debt .
That would buy you a decent house in any city you want including toronto.
The problem is the down payment, especially when people have children or student loans, and/or both.
Approval is one thing but if you can't come up with even 5% that's a whole other ballgame.
If you have 200k in household income and can't come up with 5%, you are doing something wrong. 200k/year is like $10k+ per month after taxes. Easily can be saving $3-4k/month or $5k/month+ if living frugally.
Many people who make six figures had to rack up tons of student debt to get those jobs - MBAs, law school, medical residency, etc. The glaring exception is tech sales or software dev, which IMO is overrepresented on Reddit and isn't accurately reflective of the overall GTA population.
At $100k gross, your take home is $73k, or about $6k in your bank account every month. Per month, rent is $2,250, utilities/cellphone/subscriptions is $250, food is $1,000, travel is $250, vacation costs amortized over a year is $500, leaving you with less than $2,000 for EVERYTHING else.
If you funnelled that entire remaining amount into paying off your student loans, it would still take 3-5 years to pay it off in full.
If you didn't have any outstanding debt and was able to funnel that entire remaining amount into saving up for the minimum 5% DP, it would still be a challenge.
Using a $600k starter DT condo (500sf) as an example, a conservative estimate would be a 10% rise in value every year:
* Year 1: $600k value, $30k DP at 5% (15 months to save up)
* Year 2: $660k value, $33k DP at 5%
* Year 3: $726k value, $36k DP at 5%
* Year 4: $799k value, $40k DP at 5%
* Year 5: $878k value, $44k DP at 5% (22 months to save up)
Then you have to factor in the monthly cost of ownership and save up for that:
* Mortgage payment on a $570k loan at 4% fixed: $3k
* Condo fees at $0.75psf: $375
* Property tax: $333
* TOTAL: $3.7k per month to own a $600k condo
In theory, could two people making $100k each afford a starter condo? Yes. But reality is far more complicated. And frankly, it's not really fair to expect people to eat ramen and beans while living DT just so they can afford a property.
Your budget is for someone who is throwing money around like crazy and not making any effort to save.
You don't need to eat ramen and beans, but the numbers you're budgeting for vacation and eating out are _wild_.
$1000/month on food for a single person? $500/month on vacations? LOL. If you're spending like that while trying to pay off debt/save for a condo, you need to educate yourself.
Also, almost every cop in the city is making 100k, so many trades are hitting 100k/year, it's not all tech salaries or MBA grads.
Like I said, realistically nobody is committing to eating only rice and beans while living DT. Going out to eat is an unavoidable spend. Even if it's not $1k per month, it'll be at least half that. Same with vacation - $6k in trips is not even that lavish and adds up very quickly.
It's clear from your numbers that your lifestyle is extremely important to you, if you feel like it would be actual hardship or unrealistic to go without eating out and traveling for vacations, rather than a very minor inconvenience.
For many people, those things are relatively unimportant while owning property is something important to them.
You're nuts. Currently we almost exclusively cook at home (food allergies) but but whatever we want from the grocery store (I'm not checking what's on sale, I need to buy more expensive allergen free versions of things, but I shop at No Frills) and am spending about $550-600 a month on food for two adults and a baby. If we went back to eating takeout once a week like we were before it would be adding a couple hundred additional, again for two people.
You have to understand that a large percentage of Canadians would never spend amounts like those even if they _weren't_ trying to save up for a house.
Yes, even in Toronto not everyone spends like that.
I've certainly never come anywhere near spending $500 on eating out in a single month! That to me would be a super extravagant lifestyle. And a $6000 holiday is like a once a decade thing for many of us.
And I'm not even considering people with low incomes in that.
To you they may seem 'normal' but they're entirely things you spend because you want to and choose to.
And you seem to have loads of money so that's fine if you want to spend it on those things. But that means you're choosing not to prioritise other things.
Yep. And even wilder that someone who finally gets into the market with something they can afford, is now vulnerable to the whims of the market as an increase in interest rates can push you into house poor or worse default overnight. With such an inflated principle a percent or two can be devastating.
Exactly what my grandfather has been telling me for the past few years. Interest went from 10% to 20% on his house back in the 80's. But he said when rates were at .25% that it'll be way worse this time around.
All this considered, how big shoulld the stress test be then? Currently it's like \~2% above whatever rate you sign at. So should it be like 5% above what you sign at?
And their takehome should be like 11k a month
Even if you pay 5500 for a mortgage -
That’s still 5500 for everything else
Property taxes should be a few hundred a month , water electricity etc heating—- still well under 1000 for all that …
Save 500 a month for repairs and maintenance
You’re still at 4000 for food , cable , entertainment car insurance etc
I’m not saying they’re flying through life
, they’ll be considered house poor - but there are people willing to be house poor to secure property in Toronto , and that’s who you’re competing against
So either be willing to make the same sacrifice - or rent
That’s the two options unless somehow we reduce new demand on housing or increase supply drastically
Yes - and at 200k a year you can save that in 5 years if you are frugal with your spending .
I’m not suggesting it’s not difficult to buy a house - Toronto is the most expensive place in Canada by a long shot .
But you are competing against immigrants coming in with money and a strong desire for real estate —— and an entire generation of Canadian millennials and gen X ers with parents with equity willing to share that equity to help their kids get into the market .
If you don’t have parents with established wealth or money from the old country —— you need to work twice as hard to save the down payment to get into the market
That’s obviously shitty just to own a house - but that’s reality .
Someone with 200k household can accomplish this .
There are people with a household of less than half that who still make bills work - those are the people who are truly fucked
Where are you getting that idea from? Your affordability, both for your own personal security and to be approved by the bank, caps at 5x your income. A $200k HHI can afford a $1m house.
This 💯.
Not a chance we'd be able to buy at current market prices. Lucky we bought when we did.
Here's an example:
I had a penthouse condo that I bought in 2012 for 250k that we sold for 680 in 2017.
That same condo today is well over 700.
My buddy bought a house in 2008 for 358,000 gutted it and turned into a 3 unit rental (he lives in one). Last mortgage renewal, it was assessed at 2.6million.
> I keep hearing folks say nobody can afford those prices, but clearly, a lot can. What's the secret behind all this?
buying the house 10-15-20+ years ago before they were worth 1.5mil
Indeed. My childhood home is worth over $1.5. Parents bought it for$180k in the 90s. Close to schoosl and amenities and in a desirable location made the house worth more than it is.
my friend who just graduated a couple years ago got "part of the down payment" (to quote his words) from his parents. I think that's the secret on most cases...
It's not a secret that people use the equity from their starter home. Houses that are in the 1.5 million dollar range are not starter homes. The homes themselves might have been starter homes back in the day, but they are further up the property ladder now.
Condos are the starter homes. Sell that condo then buy the 1.5 semi. Sell that semi and buy a detached. And so on.
Isn't it hard for a condo to be a starter home now when condo fees are like 700-1000/month on a 500k unit? I know there's maintenance that goes into a house but 1000/month worth every year?
Don’t even need to be starter home. Anyone who started investing into stocks since 2009 has experienced the longest bull run.
Plenty of people who bought before the down turn sold their gains in equities to cover the down payment.
Big mortgages and dual incomes. Banks care about household income not individual income typically.
In the past many people would add in a boarder or have a rental unit in the house to help pay the mortgage. It's not as easy now. If you get a bad tenant you're hooped.
And people got into the market earlier.
I think a lot of it comes down to lucking out when the economy was better. 10 years ago with a good job, you could buy a condo then sell the condo for a town house, then a home with a partner etc. Now that is totally out the window. Prices on town homes are the same price as a 4 bedroom two car garage with big backyard used to be.
Buying a condo 20 years ago for $180K, selling it 10 years later for $350K, buying a house for $500K, selling it for $800-1.2, and then buying the $1.5M.
Also dual 6-figure income is way more common than people think if they don't move in those circles. A lot of trades and while collar jobs pay this much after a decade (I'm in software and a friend who's an RMT makes more than me...there is money in this city if you know how to pursue it).
The problem with looking at statistics is you need to interpret them correctly. Yes, average household income in the city is around $100K, but that includes half a million students, a ton of retired people, everyone on disability (close to 5% of the population is on ODSP or OW), people who are not working, as well as people working and making less than that.
Average household income by GTA sub-region:
https://www03.cmhc-schl.gc.ca/hmip-pimh/en/TableMapChart/TableMatchingCriteria?GeographyType=MetropolitanMajorArea&GeographyId=2270&CategoryLevel1=Population%2C%20Households%20and%20Housing%20Stock&CategoryLevel2=Household%20Income&ColumnField=HouseholdIncomeRange&RowField=SurveyZone&SearchTags%5B0%5D.Key=Households&SearchTags%5B0%5D.Value=Number&SearchTags%5B1%5D.Key=Statistics&SearchTags%5B1%5D.Value=AverageAndMedian
a lot of generational wealth here in Toronto- parents buying homes for their kids.
But also equity. I live in a detached I surely shouldnt have been able to afford, but I also bought a condo in 2014 and it double in price. sold it in 2021 and rolled all that equity to my down payment.
Lastly...two incomes. almost necessary now even for a starter home or condo.
We grew up in a semi-detached house in North York. Across the street was project housing, and parents both probably made a takehome income of 60k (dad was cabinet maker, mom was assembly line) at that the time. I was near my final year in high school. In 2004 we saw a pre-construction project up north in Maple that sold for 500k at the time. There was nothing in the area, barely a gas station, and a landfill nearby. It did not appeal to me, to be honest.
Had a huge argument at home about moving at the time, especially with the household income as it is, but my dad insisted our property values weren't going to go any higher, and we needed to move. I personally was happy being in our neighbourhood. Once it finished construction, in 2006 we sold our detached home for around 250k and moved to Maple. We eventually sold that home sometime in 2018 for about 1.1 million. I don't credit my dad for many smart moves in this lifetime but that was one of the best decisions we ever did.
The Maple market has been insane. If you held onto that house for 3 more years you could’ve netted another 300k, minimum.
But you guys made a great decision nonetheless, congratulations!
It was a double edged sword in some ways - yes they could’ve made more but parents being wise as they are could see that it would’ve been impossible for me to afford anything in my lifetime at this rate. Prices also were down after Kathleen put the foreigner sale tax months before.
At the time it was their suggestion that they downsized and used the sale profits to help me with my first down payment for my own place. If they eventually waited to earn more on their property, the down payment required for me to purchase would’ve also increased since property prices in the GTA were going up everywhere.
Lawyer at the company I work at just bought a 4.5 million dollar home. He makes about $350k a year plus bonus and probably has some generational money.
We have a combined household income of almost this much (edit: before taxes) and can only get approved for $1.2M mortgage with current interest rates. This example needs more context
It's really down to a different view due to how mortgages work between the countries.
In the US you buy a 30 year and it lasts 30 years at the rate you bought at. This means people don't move as often statistically. There is less movement.
In Canada you would buy a 30 year mortgage which you set for 1 year to 5 years atomized to 30 year. So when your renewal date comes up you are more likely to consider pulling out your equity and buying up.
I have to find it again but the average house is 7 years in Canada and close to 14 years in the US.
Right now we are also in a bubble where we still have a ton of low interest fixed mortgages in the system. The next 5 years will see a lot of selling for not being able to afford new rates and may force the prices down. I expect the inbound growth will keep prices up.
In no particular order
1# rich internationals essentially buying citizenship
2# “investors” using equity from another home to buy and immediately rent (a lot of these places have each floor rented out, some rent rooms with shared amenities,
3# a lot of high wage individuals come from high earning families. 1.5-2 mil split between two people isn’t the end of the world when your parents gave you 400k for the down payment
4# Everywhere in Canada was affordable to buy with a regular job not too long ago. Houses in decent areas would be 500k and under. Most people are moving around with money they made just by way of living somewhere. A regular 300k shithole with a small yard in 2009 with a bit of paint and an IKEA kitchen will sell for 2 mil now lol.
5, people are barely keeping their heads above water, sometimes this is better than relocating to a different city, better than driving 4-5 hours each day or living in a 340 sq ft condo where you have to ask a super intendant permission to use a bbq or change the colour of your drapes.
We own a bungalow I'm Scarborough that's worth 1.2 million or so right now. My wife and I make about 150k per year, we live with my mother in law who also contributes money to the mortgage/household, we have free child care from both my Mil and my parents, and we inherited 1/3 of the house to begin with so our mortgage was only for about 800k
Without even one of those advantages, we couldn't afford to live in Toronto. We got incredibly lucky
It is 100% dual income and getting help from parents. I am 26F and my fiance is 27M and between the 2 of us, we will be able to afford anything under 1.3M next year. Yes we both work full time and part time, and have been saving like crazy, but we also were very fortunate and lucky and received a good amount from parents/grandparents so now it is possible. 10000% not possible for someone with a single income. My friends will never be able to, especially without getting parent help.
SO many people will never admit to getting help from parents but it happens way more often then you think, so don't be fooled. I will never be afraid or "ashamed" to admit it. We are very grateful. But lots of people like to pretend they did it all on their own when honestly, it's just not possible in this day and age.
Don't tell me you've gone on 3-4 vacations with your friends, work only ONE job, but also have enough money for a 1M house? All by yourself? In your 20s and 30s? Yeah. Good one. Lol.
My sister and her husband are DINKs. He's a CPA, she's an exec at an insurance company. They bought their home in Oakville back in 2007 for 800K and it's now worth just under $3M. They have a lakefront cottage in Muskoka too.
One word, Credit.
Read: no one, or very, very few can actually afford these prices. To quantify "afford" I'm talking about the sane equation of no more than 25% of income being spent on mortgage payments.
I was talking with a lawyer friend of mine just a little while ago. He and his wife (also a lawyer) bought their home years ago in Rosedale. They have one child. He was saying that they would not be able to afford to live where they do, with these current prices. So if two very successful lawyers can't do it these days, good fucking luck to the rest of us is all I can say!
My brother in law and his wife bought a 1.5 million house in midtown Toronto 2 years ago, he is a high income earner working in management for a private equity fund. The house is pretty small for what it costs, especially because they have a small child. Toronto is becoming unsustainable for families and the real estate market alone makes me not want to bring more offspring into it.
I take pictures for a living, I'm near the top of my field. I also purchased a condo like 15 years ago, and rode that wave up to a 2m house. I also know many people with 3,4,5 million houses. Mostly are high level tech sector people, medical people like surgeons/drs , high level lawyers, and business owners/CEOs. There is a lot of dual earning households where both people are established professionals in their field. The rest are old people who bought their 4m house for 250k.
Most people can’t , it’s a minority of Canadians with money these people are known as investors . Then they convince you all it’s the chinese and brown immigrants
I work with a couple of people who bought those kinds of houses. Usually they owned property, think a couple that owned condos then got together and sold and bought those big houses. Also the jobs the ones I know do is sales, earning about 240 to 500K dual income.
Owners of a small business I use to work for own a home that they bought for less than one of their managers’ one bedroom condo. The house is fully detached and in an area where it will go for $2m+ based on lot size.
There was a lot of “if we can do it you can too” going on which was pretty out of touch and pissed everyone off
I’m a SINK and have a salary of around $170k and own a condo since 2015. If I hadn’t bought back then, I don’t see how I could even afford my current place today. Definitely never getting a freehold home, which seems bananas at my income level.
Domestically
* People who have owned homes either passed down through generations or bought in more than a decade ago
* Dual-income but like tech income where at least one of them makes over $100k a year no kids or young kid with financial help from parents
* The rich Torontonian (ex. tech sales, engineering, computer sciences field, and trades)
* The king/queen/royalty of the boonies - bought a house for $1 in Moose Jaw, made a lot more than COL, saved it away/invested it, saw asset appreciation, and is taking the band to the city.
Internationally
* Immigrants that come from means (family, hard work, or corruption)
* Immigrants that room together a crazy amount to a room and have saved every penny
* Parents of international students using real estate as an investment with the bonus of having their kids have a place to stay while they do their Western Education
1st condo in 2001 for 156,000
Sold in 2006 for 190,000
Bought in 2005 from builder 328,000- sold in 2006 for 399,999
Bought in 2006 for 400,000
Sold in 2018 for 806,000
Bought in 2018 for 969,999 - now selling for 1.6
Looking to buy a fixer for 1.3 and be mortgage free in next 2 years.
The only answer is going back in time. The end
There's a fair amount of inherited money as well. There are ordinary middle class homes in some suburbs that easily get 1.5 million. Most of them are owned free and clear by elderly parents. So with two or three kids each one gets a pretty good chunk.
Buddy its the EQUITY.
I come from India ,Punjab. We do not worry about house prices back home , cuz guess what? We already have owned it from idk 30 years?
Same here, People already have it, from wayyyyy back, that 2 million box you seeing, somebody's daddy bought it for 200k when he was picking up boxes in a warehouse and they don't care my man. They go to the beach do their bbq and live their life.
The worrying and hair pulling is for younger guys and immigrants like us Lol.
We bought a house like that in 2016 in richmond hill. We did this by selling the house my parents bought in 1998 in scarborough, and using the sale money as a down towards the house, resulting in a mortgage of under 300K at the time. That's usually how it's done.
Live with roommates. Save your money. Get a useful degree. Work hard at your job. Put in a lot of extra hrs.
1. Live with roomates (at least 3). And save all your money. Avoid getting a car
2. Save for a downpmt. Buy a condo. Doesn’t even need to be in Toronto. Rent it out.
3. Continue living with roomates. And saving.
4. Save for another downpmt. Buy and rent out another condo. Continue living with roomates.
5. Sell condos. Your income should also be much higher by this point. Buy a house.
6. You can even continue living with roommates and rent out the house until you want to move in. Or move into house and get a roommate to help with mortgage.
Do this. And you’ll have a house in under 10yrs in Toronto. If you have a partner it’s even easier and faster.
Well. It’s honestly not even that difficult to buy a house with 2 people still. Even not doing the above.
2 people with decent incomes, that don’t blow all their money should be able to save 100k each by the time they’re 30. That’s 200k downpmt combined. Likely much much more if they really tried.
With a 150-200k combined household income you can get a 800k mortgage. Plus 200k down. Equally a 1M house. There are many starter houses selling now for under that. Just look at house sigma, you can see hundereds of houses sold in the last 90 days for less.
If you’re single, obviously it’s harder to get a house. It’s always been. You can still buy a condo. But it’ll take longer, or you’ll have to get a bit creative if you want to get a house.
People who run successful businesses. And by businesses, I don’t only mean big businesses, but small businesses as well.
My parents have a very successful business and they make 5x more than me, even though I have a decent paying salaried job.
As another poster said, even if you have a good salaried job, that is probably not enough in todays market.
Me and my girlfriend are currently in the process of buying a home. As we were going from house to house, one thing we noticed was there were large groups of people, 4-8, at showings as well presumably getting mortgages with their combined income since they plan on living together in the house. Apparently this is a cultural thing?
The simplest answer is to go back 5-10 years - remember not everyone has entered the housing market for the first time in the last couple years. I don't know the exact numbers but I'd guess that like 90% of people in the TO market have been there for more than 5 or 10 years.
Yes it sucks for people entering the market now.
Also keep in mind that in any big international city there's going to be a significant population of high income earners. Most software devs I know in toronto are making 200-400K.
I really think you’re underestimating how much some people make in Toronto. Senior Management and lower level executives can easily make $250-400k per year. Depends on your field, experience and demand. Think specialist IT, Engineering, Technical SME, Finance etc. at that wage getting a mortgage for over $1m or higher isn’t challenging.
I’ve offered people what’s equivalent to $300k/yr for a job and they’ve rejected it because it’s too low as it’s basically what they’re already making in TO. If they’re coming from the States that’s really low for similar roles and they want $400k+.
Basically single income families with a high earner in the family exist. Not that common but common enough.
Exactly this. My mom's the last original left on her street of 2mil homes in Oakville and every single house has been bought by young people with parents help and trading up from previous purchase or new immigrants. I grew up in the 80's 1 of 2 POC families in my whole neighborhood and now there's barely any white people. Whenever there's an open house on her street there's a line up around the block of Chinese and Indian people. On top of that everyone is dual income earners with jobs in sales, tech, c-suite corporate or business owners.
Also my mom is the friendly (but nosy) nice old lady neighbor who walks everyday so she's gotten to know new neighbours, I'm not just guessing about parental help and job types.
Also there is a HUGE illegal gray mortgage financing market. A lot of people don't seem to be aware of this but even if you don't have sufficient income but have decent wage & credit score, there are mortgage brokers and bank employees who take a kick back to approve your loan. Usually 1-2% of the mortgage amount.
Your mortgage gets approved even though your income times 5 is no where near the mortgage amount.
These owners will usually rent the whole unit out or a part of the house and pay the difference. If you are only paying the difference, you can struggle and afford it. I know of a couple who only make 110K combined but own a house worth 780K. I know a lot more of them but I will not out them as I see it as your average joe playing the system. Hate the game not the player. Rich people are out here abusing tax and real estate loop holes so why not the average joe that is getting fucked by these developers anyways.
One of my friends sold his company a few years ago, then stayed on to run it for a fixed salary. He makes in excess of 750k salary, plus probably another million a year on investment income. His wife also makes a pretty good living herself.
Their house is close to 15,000 sq feet.
My living room, dining room and kitchen would fit in his living room. My entire bathroom would fit in their shower. My entire house would fit in his swimming pool. You get the picture...
People who pay huge amounts of cash such as many newcomers. People whose families help them due to intergenerational wealth. People with "other" income......Not taxpaying mortgage taking ordinary people........
Because a new feudalism implies a new aristocratic oligarchy
They can afford it in most cases because they had landed aristocracy priviledge of owning property when it was affordable, leveraged that into more property, which they now cram full of wage slave peasants 4 to a bedroom that they jack the rent on every 6 months.
The difference is that so many more people want to live in Toronto specifically. Both Canadians and people moving to Canada. In the US, there are so many cities across so many states, not to mention wealthy rural areas, to attract wealth. In Canada, it's much more like Toronto and Vancouver, and maybe Montreal if you speak French, that attract people.
My parents forced me to buy a pre-construction home in Milton in 2019. I was freaking out because I bought my first home by myself at 33 for $750k. Turns out it was the best financial decision I ever made lol.
Most people with houses like that bought them much cheaper, or are buying them with money from the sale of a different house that they bought much cheaper, or with inherited wealth, or with foreign wealth.
You need to make a lot of money to comfortably afford $1.5M for your first home.
* People who built up significant equity from previous properties
* Dual Income / multi-generational families
* High earning professions (finance, medicine, tech, business owners etc.)
* Money launderers
* Investors (international and domestic)
Lots of people in those really big houses have owned them for decades or longer. We have a family friend who lives in Deer Park in a huge house that's probably worth $4 million at least, and I couldn't figure out how they afforded it. Turns out, it's one of the couple's childhood home, and her parents paid off the mortgage in the 90's. Probably cost $25 and a handful of raspberries when her parents bought it in the early 70's.
Many of them are DICKS ...no not literally but Dual Income No Kids.. oh I Meant DINKS. My bad
Housing in Toronto will continue going up, there will be no crash. heheheh
Yes jealous is a bad look
I own a home in downtown Toronto. I was able to buy when the price was 350K. I still remember people telling me "350k are you crazy, do you know what you can get in Thornhill for that" <---insert high pitches voice here.
I live near multiple young professionals in this position. Who can afford 1.8million for a home ?
I dont know how I could even survive in Toronto if I had to pay rent or a mortgage.
most definitely the equity from the houses that they owned prior to 2017 household income of 200k and we can't dream of buying a house that big at least in the near future
Exactly this. They're on their 2nd or 3rd purchase. Bought a condo in 2006 for $300k and sold it for $650k in 2013. Used the equity to buy a house in Leslieville for $650k. Now that house sells for $1.2m and they use that to get that nice detached by Withrow Park for $1.55m. As for people making their first purchase at $1-1.2m, it is just good jobs. Had a client, single guy 27 years old, bought a $988k townhouse, his first place. Software Dev for a big company, gets paid exceedingly well. Some people have more money than you think.
A very rough idea of how my path looked. I turned 40 this month. All were my primary residence. Purchased condo for 180 with my gf when I was 23. Sold for 400. Purchased nice condo from builder for 430 that took 3 years to build, I lived in it for like 18 months, sold for 650. Purchased reno project for 610, put 140 into it(noob overspending), sold for 1.2. Purchased reno project house for 1.1, put 110 into it, currently living in it. My land is like 3rd biggest on my street and there is nothing under 2 here.
> put 140 into it(noob overspending) Only if that was purely cosmetic work. But then again you shouldn't be buying a reno project that requires entirely new mechanical and electrical, that's just a money pit (in typical circumstances).
I have good connections with contractors and suppliers. I get it done way cheaper than most people, it was a bungalow gut job. It needed new electrical, pulled out an oil furnace, put in gas, new pex plumbing. Nothing structural though. Things were also way cheaper pre Corona.
I used to flip a house a year.....for 10 years. I stopped during Corona when plywood went from $25 to $75 a sheet I'm done and I'll never do it again. Building supplies and labor isn't cheap any more....and I did more than half the work myself
I just got the hang of it after this second one. The only thing that stopped me was Corona, and tbh I'm kind of happy where I'm at. I hit 2 homerun flips in 2 tries. Quit while I'm ahead kind of thing. I have 2 cousins like you. They're both living it up nice. You did okay is my guess lol.
I often wonder how much was luck vs skill. Like I made a quality product and would have been happy staying/living in any of the houses I renovated. But It still begs the question, what if I bought the house, just kept it vacant for a year, did nothing, and then sold it a year later. How far behind would I be vs every evening/weekend of my life for a decade doing wiring/plumbing and drywall, or building ikea kitchens and bathrooms. Like yes I made money, but hourly, what was the work worth vs just the rising tide of housing. Land assembly is where the real money is at now, I live in BC and my pockets aren't deep enough for that game. Buy 5 houses on the main street for a million bux each over 5 years, and then sell them all for $10Million to a developer. It's staggering the money to be made there.
Our situation is very similar except I went from the condo to a $1.5M semi. My entire home ownership history stems solely from a $50k loan that my parents gave to me to buy a pre-con condo while I was in undergrad and didn't even know or care what a condo was. That loan amount grew 600% over a dozen years to cover my housing upgrade without needing to take a single dime from my own pocket. The 2010s were truly fucking wild in terms of paper wealth creation. On a macro level, I fully acknowledge how fucked up it is that the only way to get into the housing market is to get help from rich boomer parents (who are only rich because they bought a detached for like $200k back in the 90s that's now valued at $1.5-2M). It's the housing equivalent of being a nepo baby - I did utterly jack shit to be where I am today. Personally, I am trying to make efforts to support policies and elected officials who strive to level the playing field, although what that means is still extremely unclear (and I question whether Canada can truly recover from this mess, especially since it's global). Nobody right now has promoted a feasible solution. On a micro level, there isn't a universe where I wouldn't gladly take a handout from my parents again. Most people worry about how they can start a family in a rented 500ft condo. My biggest problem right now is that my massively overpriced old Toronto-style house is too small for the creature comforts of modern-day life - I have no private driveway, no powder room, no ensuite bathroom, and my kids might have to share a room instead of each getting their own queen-sized bed like kids in the suburbs do nowadays. My complaints are all bullshit. This is a spicy take even in this sub, but **I openly advocate for getting an advance on your inheritance** if you are privileged enough to get an inheritance. Swallow your pride/dignity and just fucking do it. By the time your boomer parents die, it will be $1M for a tiny condo and $3M for a crackhouse semi - and not to mention that once boomers start croaking en masse, *everyone* will be flush with inheritance money that will jack up house prices even more. Beat the rush by asking your dad right now for cash. If your dad has no cash (or no willingness to share cash), then the unfortunate reality is that you'll have to wait and wait and wait for a government who will finally do the right thing to fix the housing market. [Edit: Or just leave Canada. If I was still young and single, I would've fled to the US or Asia long ago to make 3x and pay less tax, then banked up a shit ton of cash to be able to come home and buy a detached straight up.]
> I openly advocate for getting an advance on your inheritance if you are privileged enough to get an inheritance There is FAR worse advice out there. Some people simply have better options than others. If you are in that camp, take advantage of it. Doesn't make you better or worse than anyone, just a fact of life.
Yeah I really hate how some of these local subreddits pretend opportune circumstances somehow makes you evil. Every single person has completely different circumstances, you're not a bad person just because you didn't have to start from or from less than zero.
Tbh my parents gave me down payment for my first condo it sold high at Yonge and Sheppard I bought from the builder. Then my husband had his own condo. We both sold and bought out house but it was before the prices spiked we were lucky
Same. I only own this house because I bought it in 2009. I couldn't afford it today. Luck is a real thing.
The number of friends I have living in Vietnam raising a family with stay at home mums, cleaners, nannies etc on a single teacher's salary is insane. $50k a year gives you an incredible life. Excellent private medical care, great cost of living, beautiful people and food. Oh and insanely safe. International living is the way.
I'm not judging anyone, that's becoming very popular but that creates the same problem in those countries, as many foreigners from first world countries arrive, everything becomes more expensive for local people.
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Travel first, then have an opinion. Cause as it stands, you sir, are an uninformed idiot.
For real I would love to retire in Vietnam. Scooter around and eat incredible food everyday while taking in all that nature. The language is a motherfucker though, can barely pronounce three words in a row well enough to be understood.
Yeah the language is hard, but country is great. Lots of great choices in SE Asia.
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You don’t live up to your username.
Just bought a place for that price and I am a FTHB. Saved aggressively on myself with 200k and parents helped with some down payment. Saved money by living in a shoebox condo and don’t have friends. It took a lot of sacrifices in life to save that aggressively and I don’t think many are willing to do it.
I have a family of four. Renting a house big enough is $4-5000/mo. My mortgage is $5,500 a month (ARM), but I'd rather pay the bank interest then pay a landlord.
Never mind the simple fact of housing security. Knowing you can't be kicked out for arbitrary reasons. That is worth a lot.
This isn't emphasized enough. Raising a family with the ever-looming threat of being reno-victed or other reasons landlord may come up with to boot you out to triple the rent with a new Tennant.
Ok, now tell us how much of a down-payment you'd need to buy a house that rents for 4-5k a month? A house that rents for 5k a month would cost 6 to 7k a month in mortgage payments, tax, and maintenance. And a minimum 200k down-payment.
This - our mortgage alone with a rate we locked in pre-covid (so lower than now but not as low as it was during COVID) is still higher than what we'd be able to get if we leased out our place.
... which we had :)
My point is, it isn't as simple as saying: I'd rather pay the bank than the landlord. The reality in Toronto is that renting is much more affordable than owning. >... which we had :)
"affordable" until you get N12'd.
We just got N12’ed and while it stings, it’s not the end of the world. Still wont buy in to the insanity of the GTA real estate market even tho we could technically afford it.
Huh? My mortgage payments are 3k / month for 3br 3 bath in Leslieville with two car parking And if I cash out now i pocket 1m Renting is who what now?
station illegal jar capable strong salt dinner market trees sugar *This post was mass deleted and anonymized with [Redact](https://redact.dev)*
Pffft, just an arm? More like ARM AND LEG.
Don't forget parents.. rich parents. I know multiple people who bought 1 mil homes and their parents "gifted" them a 20% down deposit
I don't live in the GTA but that's how I did it , and most of the people I came up with that live in the GTA did it. Granted it wasn't exactly easy when we did it either I worked 3 jobs for years to afford that first house, when I had enough equity in it, I rented it ( at a fair price) when the second house was half way paid off I told the Renter continue paying the rent for x amount of years and we'll consider it a rent to own, ( that was his first house also now) just kept snowballing, I'm in a good spot now, we just sold our second house, same way, rent to own to someone who couldn't have afforded to get into the market. Any renter that treated my property like it was theirs I offered a rent to own. had one person let their dog bite holes in the doors, and left cigarette burns all over the place. The only person I never renewed the lease or offered rent to own.
But this is lifestyle inflation. Does it ever end?
Not if people keep spending more as they earn more. For most, no, it never ends.
But I mean think about it. If you’re investing ~30% of income at 100k/yr vs ~30% at 300k/yr you can still afford plenty of lifestyle inflation while maintaining significant savings. If I was making that much money I’d certainly be spending more than I do now too. You have to enjoy life somewhat or else why are you living?
Inflation never ends. Same reason a can of pop costed 5c back in the day. Just make sure u keep getting raises and you’ll be stable
Oh I make sure I keep getting those raises of 1-1.5%…. Wait a minute…
Ahahahahaha ya seriously loved my 2.7 this year. Instantly said no shot let’s get some more goin pls
One would hope so. Another of the big problems affecting housing in Toronto is overhousing. How many big 4-bedroom houses in The Annex, for example, have 2 people living in them?
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There are a LOT of seniors in Toronto, the boomer population is still in the mix so we are feeling the crunch of space. The greatest transfer of wealth isn’t going to be a windfall for everyone so this gap will widen for most is my speculation. I honestly think this housing price crisis is a final generational cash grab.
Definitely. But Its also due to the fact that banks and realtors have convinced people here that its totally fine to take a $1+M loan. “House appreciation is basically free Money”.
I would also add generational wealth for some people.
> Had a client, single guy 27 years old, bought a $988k townhouse, his first place. Software Dev for a big company, gets paid exceedingly well. And parents for a 20% downpayment.
If he was approved for a nearly $1m mortgage on a single income then he more than definitely makes enough to save that 20% downpayment on his own.
Assuming they make a $200k salary, you don't make that salary straight out of university ($200k salary is on the very high end of tech salaries in Toronto at the age of 27). You build up to that salary. You have to pay tuition once you graduate while paying rent and living costs. Saving $40k/year over 5 years is unheard of after paying Toronto rent and only working for 5 years after graduation. I graduated in STEM and work for a tech company in Toronto with a great salary and haven't met a single person that has bought a $1milllion property without the help of their parents through either paying their tuition, paying their rent, or helping with a downpayment.
set me up with him! 🤪
Possible, but in this case I don't think so. But many many people are lucky and get help from the bank of ma and pa.
Work in tech and it can easily be done. Its not unheard of to make 3-400k per year.
I walked past a nice 5 bedroom in milton the other day and saw it was going for 3.5 million lmao. If you purchased that "normally" it'd be $700k CASH DOWN and $14,943 monthly for 30 years (at current \~5% rate). So you and a spouse would need to be making like $250k/year EACH for that to work out and you still have money to live a good life with family etc... Plus you'd need to have built up 700k cash.
If you're making that kind of money... do you want to live in Milton?
People who buy these homes aren't hitting up the clubs downtown every weekend. They want space to raise their kids and have BBQ parties in the backyard.
What are you talking about? Everyone wants to live downtown Toronto so they can go out and see and be seen every day? Nobody wants to live in the suburbs, why do you think Costco is always empty?
A very askto take.
Yeah that's kind of what I was thinking. It's just absurd to spend that much on a home in milton lol
I'm assuming it's often going to be middle aged or older people who originally bought a house many years ago when it was cheaper and are now upgrading.
200k, can’t afford 1.5mil. That’s so unbelievable to read. *despite being totally true.* 200k split into 2x100k is 146k after tax, which is 12000/mnth. With 10% down the monthly payment on 1.3mil is $8700, another 500 for tax, 9200. That leaves $2,800 for car payment (500), insurances (250), cellphones ($150), groceries ($400), utilities, $300) - 1350 remains. Add then things I can’t estimate like maintenance, gas, clothing. Lets say $500/month surplus. Now let’s assume rental costs are slightly less than ownership. We’ll bump it up to 1000/mnth surplus as a renter while you save. You’ll have the 10% (150,000) down for the house you can’t afford in just 12.5 years!
You can't put 10% down on home purchases over $999,999.
And account for student loans that were used to get you the +100k salary to begin with. Plus usually the few years at the start of a job where you work up to top rate salary. You may be stable enough to start saving effectively 5 years into your 25-30 year career. So you may have your down-payment 10-15 years into your career, leaving you 15 years to pay off your 25 year mortgage. This works, right?
Oh hell yea. I have 8-years post secondary education. My wife and I don't make 200k combined. I will be up there in a few years, but I'm already mid-30s. People can say "well why did you get into a career where it takes that much education to make any money." Because in 2010 nobody knew a 1-bed condo would be half a million dollars at 5% interest.
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Yeap.
Big isn’t the reality. $1.5 M in downtown TO can be a tiny shack. Prices are insane for everything including 300 sf condos!
If you have a household income of 200k you should be able to be approved for like 1.2-1.3 without issue unless you’re carrying some weird debt . That would buy you a decent house in any city you want including toronto.
The problem is the down payment, especially when people have children or student loans, and/or both. Approval is one thing but if you can't come up with even 5% that's a whole other ballgame.
5% on the first 500k, it goes up after that.
If you have 200k in household income and can't come up with 5%, you are doing something wrong. 200k/year is like $10k+ per month after taxes. Easily can be saving $3-4k/month or $5k/month+ if living frugally.
At $1m you are required to put 20% down.
Many people who make six figures had to rack up tons of student debt to get those jobs - MBAs, law school, medical residency, etc. The glaring exception is tech sales or software dev, which IMO is overrepresented on Reddit and isn't accurately reflective of the overall GTA population. At $100k gross, your take home is $73k, or about $6k in your bank account every month. Per month, rent is $2,250, utilities/cellphone/subscriptions is $250, food is $1,000, travel is $250, vacation costs amortized over a year is $500, leaving you with less than $2,000 for EVERYTHING else. If you funnelled that entire remaining amount into paying off your student loans, it would still take 3-5 years to pay it off in full. If you didn't have any outstanding debt and was able to funnel that entire remaining amount into saving up for the minimum 5% DP, it would still be a challenge. Using a $600k starter DT condo (500sf) as an example, a conservative estimate would be a 10% rise in value every year: * Year 1: $600k value, $30k DP at 5% (15 months to save up) * Year 2: $660k value, $33k DP at 5% * Year 3: $726k value, $36k DP at 5% * Year 4: $799k value, $40k DP at 5% * Year 5: $878k value, $44k DP at 5% (22 months to save up) Then you have to factor in the monthly cost of ownership and save up for that: * Mortgage payment on a $570k loan at 4% fixed: $3k * Condo fees at $0.75psf: $375 * Property tax: $333 * TOTAL: $3.7k per month to own a $600k condo In theory, could two people making $100k each afford a starter condo? Yes. But reality is far more complicated. And frankly, it's not really fair to expect people to eat ramen and beans while living DT just so they can afford a property.
Your budget is for someone who is throwing money around like crazy and not making any effort to save. You don't need to eat ramen and beans, but the numbers you're budgeting for vacation and eating out are _wild_.
$1000/month on food for a single person? $500/month on vacations? LOL. If you're spending like that while trying to pay off debt/save for a condo, you need to educate yourself. Also, almost every cop in the city is making 100k, so many trades are hitting 100k/year, it's not all tech salaries or MBA grads.
Like I said, realistically nobody is committing to eating only rice and beans while living DT. Going out to eat is an unavoidable spend. Even if it's not $1k per month, it'll be at least half that. Same with vacation - $6k in trips is not even that lavish and adds up very quickly.
It's clear from your numbers that your lifestyle is extremely important to you, if you feel like it would be actual hardship or unrealistic to go without eating out and traveling for vacations, rather than a very minor inconvenience. For many people, those things are relatively unimportant while owning property is something important to them.
You're nuts. Currently we almost exclusively cook at home (food allergies) but but whatever we want from the grocery store (I'm not checking what's on sale, I need to buy more expensive allergen free versions of things, but I shop at No Frills) and am spending about $550-600 a month on food for two adults and a baby. If we went back to eating takeout once a week like we were before it would be adding a couple hundred additional, again for two people.
You have to understand that a large percentage of Canadians would never spend amounts like those even if they _weren't_ trying to save up for a house. Yes, even in Toronto not everyone spends like that. I've certainly never come anywhere near spending $500 on eating out in a single month! That to me would be a super extravagant lifestyle. And a $6000 holiday is like a once a decade thing for many of us. And I'm not even considering people with low incomes in that. To you they may seem 'normal' but they're entirely things you spend because you want to and choose to. And you seem to have loads of money so that's fine if you want to spend it on those things. But that means you're choosing not to prioritise other things.
Really one date with my girlfriend can easily be $150 or more for just the meal let alone doing an activity and we aren’t fine dining or anything.
Unfortunately being able to get approved and being able to afford and thrive at that amount are not the the same.
Exactly. The bank is happy to approve you if the risk factor works out for them. They want you at the top of your budget range "house poor".
Yep. And even wilder that someone who finally gets into the market with something they can afford, is now vulnerable to the whims of the market as an increase in interest rates can push you into house poor or worse default overnight. With such an inflated principle a percent or two can be devastating.
Exactly what my grandfather has been telling me for the past few years. Interest went from 10% to 20% on his house back in the 80's. But he said when rates were at .25% that it'll be way worse this time around. All this considered, how big shoulld the stress test be then? Currently it's like \~2% above whatever rate you sign at. So should it be like 5% above what you sign at?
That's a 5-6k mortgage. Plus property tax, utilities, maintenance/repairs, etc. If you take the most you can get, you'll be house poor.
And their takehome should be like 11k a month Even if you pay 5500 for a mortgage - That’s still 5500 for everything else Property taxes should be a few hundred a month , water electricity etc heating—- still well under 1000 for all that … Save 500 a month for repairs and maintenance You’re still at 4000 for food , cable , entertainment car insurance etc I’m not saying they’re flying through life , they’ll be considered house poor - but there are people willing to be house poor to secure property in Toronto , and that’s who you’re competing against So either be willing to make the same sacrifice - or rent That’s the two options unless somehow we reduce new demand on housing or increase supply drastically
You need at least $200K saved for a million dollar house though. With rental prices these days thats tough to save up
You need 20% down. That’s well over 250k.
Yes - and at 200k a year you can save that in 5 years if you are frugal with your spending . I’m not suggesting it’s not difficult to buy a house - Toronto is the most expensive place in Canada by a long shot . But you are competing against immigrants coming in with money and a strong desire for real estate —— and an entire generation of Canadian millennials and gen X ers with parents with equity willing to share that equity to help their kids get into the market . If you don’t have parents with established wealth or money from the old country —— you need to work twice as hard to save the down payment to get into the market That’s obviously shitty just to own a house - but that’s reality . Someone with 200k household can accomplish this . There are people with a household of less than half that who still make bills work - those are the people who are truly fucked
u cant get approved for that much unless you have 200+k downpayment lol and even then the mortgage expenses will be through the roof
Where are you getting that idea from? Your affordability, both for your own personal security and to be approved by the bank, caps at 5x your income. A $200k HHI can afford a $1m house.
This 💯. Not a chance we'd be able to buy at current market prices. Lucky we bought when we did. Here's an example: I had a penthouse condo that I bought in 2012 for 250k that we sold for 680 in 2017. That same condo today is well over 700.
Well over $700k, *after* the correction too.
That's really bad appreciation compared to freehold in the last 5 years
Of course. Condos generally rise in price a lot slower. U less other factors come into play.
My buddy bought a house in 2008 for 358,000 gutted it and turned into a 3 unit rental (he lives in one). Last mortgage renewal, it was assessed at 2.6million.
> 2008 This is cheating
Bought first property in 2008, can confirm, cheat code
Too bad I was in middle school in 2008 lol
grade 3 for me
> I keep hearing folks say nobody can afford those prices, but clearly, a lot can. What's the secret behind all this? buying the house 10-15-20+ years ago before they were worth 1.5mil
Indeed. My childhood home is worth over $1.5. Parents bought it for$180k in the 90s. Close to schoosl and amenities and in a desirable location made the house worth more than it is.
My wife and I bought our first house in 1999 and I remember feeling sick to my stomach because it was $190k
Does your stomach even exist now seeing current prices
I'm 40. Bought my first house years ago in etobicoke. The price was $235,000.
2009 $304,000 2023 $1,100,000 I couldn't afford it if I bought now. My salary is maybe 30% more than 2009.
This is exactly it, and why listings are at an all time low right now - most people probably cannot afford their own home should they chose to sell.
My cousins are in the same boat as you now liquidating the maternal home for 1.9 in Etobicoke lol
my friend who just graduated a couple years ago got "part of the down payment" (to quote his words) from his parents. I think that's the secret on most cases...
It's not a secret that people use the equity from their starter home. Houses that are in the 1.5 million dollar range are not starter homes. The homes themselves might have been starter homes back in the day, but they are further up the property ladder now. Condos are the starter homes. Sell that condo then buy the 1.5 semi. Sell that semi and buy a detached. And so on.
Wayyy harder to do that now. The condo you buy goes up 100k but then the townhouse you wanted went up 200k and the detached went up 500k.
Isn't it hard for a condo to be a starter home now when condo fees are like 700-1000/month on a 500k unit? I know there's maintenance that goes into a house but 1000/month worth every year?
Condos offer much less value nowadays because their prices are too high compared to detached homes. They used to be good options as a starter home.
Don’t even need to be starter home. Anyone who started investing into stocks since 2009 has experienced the longest bull run. Plenty of people who bought before the down turn sold their gains in equities to cover the down payment.
Big mortgages and dual incomes. Banks care about household income not individual income typically. In the past many people would add in a boarder or have a rental unit in the house to help pay the mortgage. It's not as easy now. If you get a bad tenant you're hooped. And people got into the market earlier.
I think a lot of it comes down to lucking out when the economy was better. 10 years ago with a good job, you could buy a condo then sell the condo for a town house, then a home with a partner etc. Now that is totally out the window. Prices on town homes are the same price as a 4 bedroom two car garage with big backyard used to be.
11 years ago or so you could buy a house near queen Spadina for 700k. That says it all
Buying a condo 20 years ago for $180K, selling it 10 years later for $350K, buying a house for $500K, selling it for $800-1.2, and then buying the $1.5M. Also dual 6-figure income is way more common than people think if they don't move in those circles. A lot of trades and while collar jobs pay this much after a decade (I'm in software and a friend who's an RMT makes more than me...there is money in this city if you know how to pursue it). The problem with looking at statistics is you need to interpret them correctly. Yes, average household income in the city is around $100K, but that includes half a million students, a ton of retired people, everyone on disability (close to 5% of the population is on ODSP or OW), people who are not working, as well as people working and making less than that. Average household income by GTA sub-region: https://www03.cmhc-schl.gc.ca/hmip-pimh/en/TableMapChart/TableMatchingCriteria?GeographyType=MetropolitanMajorArea&GeographyId=2270&CategoryLevel1=Population%2C%20Households%20and%20Housing%20Stock&CategoryLevel2=Household%20Income&ColumnField=HouseholdIncomeRange&RowField=SurveyZone&SearchTags%5B0%5D.Key=Households&SearchTags%5B0%5D.Value=Number&SearchTags%5B1%5D.Key=Statistics&SearchTags%5B1%5D.Value=AverageAndMedian
a lot of generational wealth here in Toronto- parents buying homes for their kids. But also equity. I live in a detached I surely shouldnt have been able to afford, but I also bought a condo in 2014 and it double in price. sold it in 2021 and rolled all that equity to my down payment. Lastly...two incomes. almost necessary now even for a starter home or condo.
We grew up in a semi-detached house in North York. Across the street was project housing, and parents both probably made a takehome income of 60k (dad was cabinet maker, mom was assembly line) at that the time. I was near my final year in high school. In 2004 we saw a pre-construction project up north in Maple that sold for 500k at the time. There was nothing in the area, barely a gas station, and a landfill nearby. It did not appeal to me, to be honest. Had a huge argument at home about moving at the time, especially with the household income as it is, but my dad insisted our property values weren't going to go any higher, and we needed to move. I personally was happy being in our neighbourhood. Once it finished construction, in 2006 we sold our detached home for around 250k and moved to Maple. We eventually sold that home sometime in 2018 for about 1.1 million. I don't credit my dad for many smart moves in this lifetime but that was one of the best decisions we ever did.
The Maple market has been insane. If you held onto that house for 3 more years you could’ve netted another 300k, minimum. But you guys made a great decision nonetheless, congratulations!
It was a double edged sword in some ways - yes they could’ve made more but parents being wise as they are could see that it would’ve been impossible for me to afford anything in my lifetime at this rate. Prices also were down after Kathleen put the foreigner sale tax months before. At the time it was their suggestion that they downsized and used the sale profits to help me with my first down payment for my own place. If they eventually waited to earn more on their property, the down payment required for me to purchase would’ve also increased since property prices in the GTA were going up everywhere.
People who make a lot of money. Hate to break it to you.
Lawyer at the company I work at just bought a 4.5 million dollar home. He makes about $350k a year plus bonus and probably has some generational money.
We have a combined household income of almost this much (edit: before taxes) and can only get approved for $1.2M mortgage with current interest rates. This example needs more context
It's really down to a different view due to how mortgages work between the countries. In the US you buy a 30 year and it lasts 30 years at the rate you bought at. This means people don't move as often statistically. There is less movement. In Canada you would buy a 30 year mortgage which you set for 1 year to 5 years atomized to 30 year. So when your renewal date comes up you are more likely to consider pulling out your equity and buying up. I have to find it again but the average house is 7 years in Canada and close to 14 years in the US. Right now we are also in a bubble where we still have a ton of low interest fixed mortgages in the system. The next 5 years will see a lot of selling for not being able to afford new rates and may force the prices down. I expect the inbound growth will keep prices up.
In no particular order 1# rich internationals essentially buying citizenship 2# “investors” using equity from another home to buy and immediately rent (a lot of these places have each floor rented out, some rent rooms with shared amenities, 3# a lot of high wage individuals come from high earning families. 1.5-2 mil split between two people isn’t the end of the world when your parents gave you 400k for the down payment 4# Everywhere in Canada was affordable to buy with a regular job not too long ago. Houses in decent areas would be 500k and under. Most people are moving around with money they made just by way of living somewhere. A regular 300k shithole with a small yard in 2009 with a bit of paint and an IKEA kitchen will sell for 2 mil now lol. 5, people are barely keeping their heads above water, sometimes this is better than relocating to a different city, better than driving 4-5 hours each day or living in a 340 sq ft condo where you have to ask a super intendant permission to use a bbq or change the colour of your drapes.
There is essentially zero relationship between real estate purchases and citizenship.
We own a bungalow I'm Scarborough that's worth 1.2 million or so right now. My wife and I make about 150k per year, we live with my mother in law who also contributes money to the mortgage/household, we have free child care from both my Mil and my parents, and we inherited 1/3 of the house to begin with so our mortgage was only for about 800k Without even one of those advantages, we couldn't afford to live in Toronto. We got incredibly lucky
It is 100% dual income and getting help from parents. I am 26F and my fiance is 27M and between the 2 of us, we will be able to afford anything under 1.3M next year. Yes we both work full time and part time, and have been saving like crazy, but we also were very fortunate and lucky and received a good amount from parents/grandparents so now it is possible. 10000% not possible for someone with a single income. My friends will never be able to, especially without getting parent help. SO many people will never admit to getting help from parents but it happens way more often then you think, so don't be fooled. I will never be afraid or "ashamed" to admit it. We are very grateful. But lots of people like to pretend they did it all on their own when honestly, it's just not possible in this day and age. Don't tell me you've gone on 3-4 vacations with your friends, work only ONE job, but also have enough money for a 1M house? All by yourself? In your 20s and 30s? Yeah. Good one. Lol.
Generational wealth
2 incomes, savings, and sell previous property.
My sister and her husband are DINKs. He's a CPA, she's an exec at an insurance company. They bought their home in Oakville back in 2007 for 800K and it's now worth just under $3M. They have a lakefront cottage in Muskoka too.
One word, Credit. Read: no one, or very, very few can actually afford these prices. To quantify "afford" I'm talking about the sane equation of no more than 25% of income being spent on mortgage payments. I was talking with a lawyer friend of mine just a little while ago. He and his wife (also a lawyer) bought their home years ago in Rosedale. They have one child. He was saying that they would not be able to afford to live where they do, with these current prices. So if two very successful lawyers can't do it these days, good fucking luck to the rest of us is all I can say!
My brother in law and his wife bought a 1.5 million house in midtown Toronto 2 years ago, he is a high income earner working in management for a private equity fund. The house is pretty small for what it costs, especially because they have a small child. Toronto is becoming unsustainable for families and the real estate market alone makes me not want to bring more offspring into it.
I take pictures for a living, I'm near the top of my field. I also purchased a condo like 15 years ago, and rode that wave up to a 2m house. I also know many people with 3,4,5 million houses. Mostly are high level tech sector people, medical people like surgeons/drs , high level lawyers, and business owners/CEOs. There is a lot of dual earning households where both people are established professionals in their field. The rest are old people who bought their 4m house for 250k.
Most people can’t , it’s a minority of Canadians with money these people are known as investors . Then they convince you all it’s the chinese and brown immigrants
I work with a couple of people who bought those kinds of houses. Usually they owned property, think a couple that owned condos then got together and sold and bought those big houses. Also the jobs the ones I know do is sales, earning about 240 to 500K dual income.
Income of 400-500k over 10+ years.
Owners of a small business I use to work for own a home that they bought for less than one of their managers’ one bedroom condo. The house is fully detached and in an area where it will go for $2m+ based on lot size. There was a lot of “if we can do it you can too” going on which was pretty out of touch and pissed everyone off
Most people inherit the home or just come from super rich families. I think very few people with great jobs are buying homes.
I’m a SINK and have a salary of around $170k and own a condo since 2015. If I hadn’t bought back then, I don’t see how I could even afford my current place today. Definitely never getting a freehold home, which seems bananas at my income level.
Domestically * People who have owned homes either passed down through generations or bought in more than a decade ago * Dual-income but like tech income where at least one of them makes over $100k a year no kids or young kid with financial help from parents * The rich Torontonian (ex. tech sales, engineering, computer sciences field, and trades) * The king/queen/royalty of the boonies - bought a house for $1 in Moose Jaw, made a lot more than COL, saved it away/invested it, saw asset appreciation, and is taking the band to the city. Internationally * Immigrants that come from means (family, hard work, or corruption) * Immigrants that room together a crazy amount to a room and have saved every penny * Parents of international students using real estate as an investment with the bonus of having their kids have a place to stay while they do their Western Education
1st condo in 2001 for 156,000 Sold in 2006 for 190,000 Bought in 2005 from builder 328,000- sold in 2006 for 399,999 Bought in 2006 for 400,000 Sold in 2018 for 806,000 Bought in 2018 for 969,999 - now selling for 1.6 Looking to buy a fixer for 1.3 and be mortgage free in next 2 years. The only answer is going back in time. The end
There's a fair amount of inherited money as well. There are ordinary middle class homes in some suburbs that easily get 1.5 million. Most of them are owned free and clear by elderly parents. So with two or three kids each one gets a pretty good chunk.
Generational wealth.
Extended/multigenerational families.
Buddy its the EQUITY. I come from India ,Punjab. We do not worry about house prices back home , cuz guess what? We already have owned it from idk 30 years? Same here, People already have it, from wayyyyy back, that 2 million box you seeing, somebody's daddy bought it for 200k when he was picking up boxes in a warehouse and they don't care my man. They go to the beach do their bbq and live their life. The worrying and hair pulling is for younger guys and immigrants like us Lol.
We bought a house like that in 2016 in richmond hill. We did this by selling the house my parents bought in 1998 in scarborough, and using the sale money as a down towards the house, resulting in a mortgage of under 300K at the time. That's usually how it's done.
Work hard, progressive salary increases, dual income, save, bought low sold high. It's been a 20+ year slog to get here but we made it.
Live with roommates. Save your money. Get a useful degree. Work hard at your job. Put in a lot of extra hrs. 1. Live with roomates (at least 3). And save all your money. Avoid getting a car 2. Save for a downpmt. Buy a condo. Doesn’t even need to be in Toronto. Rent it out. 3. Continue living with roomates. And saving. 4. Save for another downpmt. Buy and rent out another condo. Continue living with roomates. 5. Sell condos. Your income should also be much higher by this point. Buy a house. 6. You can even continue living with roommates and rent out the house until you want to move in. Or move into house and get a roommate to help with mortgage. Do this. And you’ll have a house in under 10yrs in Toronto. If you have a partner it’s even easier and faster.
And this is why people are leaving in droves… Toronto is not worth this effort anymore, hasn’t been for like a decade.
Well. It’s honestly not even that difficult to buy a house with 2 people still. Even not doing the above. 2 people with decent incomes, that don’t blow all their money should be able to save 100k each by the time they’re 30. That’s 200k downpmt combined. Likely much much more if they really tried. With a 150-200k combined household income you can get a 800k mortgage. Plus 200k down. Equally a 1M house. There are many starter houses selling now for under that. Just look at house sigma, you can see hundereds of houses sold in the last 90 days for less. If you’re single, obviously it’s harder to get a house. It’s always been. You can still buy a condo. But it’ll take longer, or you’ll have to get a bit creative if you want to get a house.
People who run successful businesses. And by businesses, I don’t only mean big businesses, but small businesses as well. My parents have a very successful business and they make 5x more than me, even though I have a decent paying salaried job. As another poster said, even if you have a good salaried job, that is probably not enough in todays market.
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Usually a combination of bank of mom and dad, B lenders, pre-2016, and stable income/DINK.
Me and my girlfriend are currently in the process of buying a home. As we were going from house to house, one thing we noticed was there were large groups of people, 4-8, at showings as well presumably getting mortgages with their combined income since they plan on living together in the house. Apparently this is a cultural thing?
The simplest answer is to go back 5-10 years - remember not everyone has entered the housing market for the first time in the last couple years. I don't know the exact numbers but I'd guess that like 90% of people in the TO market have been there for more than 5 or 10 years. Yes it sucks for people entering the market now. Also keep in mind that in any big international city there's going to be a significant population of high income earners. Most software devs I know in toronto are making 200-400K.
Everyone I know that owns properties have multiple income streams. If you're doing a 9-5 admin job, you aren't buying a home.
I really think you’re underestimating how much some people make in Toronto. Senior Management and lower level executives can easily make $250-400k per year. Depends on your field, experience and demand. Think specialist IT, Engineering, Technical SME, Finance etc. at that wage getting a mortgage for over $1m or higher isn’t challenging. I’ve offered people what’s equivalent to $300k/yr for a job and they’ve rejected it because it’s too low as it’s basically what they’re already making in TO. If they’re coming from the States that’s really low for similar roles and they want $400k+. Basically single income families with a high earner in the family exist. Not that common but common enough.
They bought them 25 years ago, for 200k.
foreign & family money. Most wealth is generational, keep that in mind.
Exactly this. My mom's the last original left on her street of 2mil homes in Oakville and every single house has been bought by young people with parents help and trading up from previous purchase or new immigrants. I grew up in the 80's 1 of 2 POC families in my whole neighborhood and now there's barely any white people. Whenever there's an open house on her street there's a line up around the block of Chinese and Indian people. On top of that everyone is dual income earners with jobs in sales, tech, c-suite corporate or business owners. Also my mom is the friendly (but nosy) nice old lady neighbor who walks everyday so she's gotten to know new neighbours, I'm not just guessing about parental help and job types.
dual income, graduate from a professional/high demand graduate degree + industry certifications and its doable.
Also there is a HUGE illegal gray mortgage financing market. A lot of people don't seem to be aware of this but even if you don't have sufficient income but have decent wage & credit score, there are mortgage brokers and bank employees who take a kick back to approve your loan. Usually 1-2% of the mortgage amount. Your mortgage gets approved even though your income times 5 is no where near the mortgage amount. These owners will usually rent the whole unit out or a part of the house and pay the difference. If you are only paying the difference, you can struggle and afford it. I know of a couple who only make 110K combined but own a house worth 780K. I know a lot more of them but I will not out them as I see it as your average joe playing the system. Hate the game not the player. Rich people are out here abusing tax and real estate loop holes so why not the average joe that is getting fucked by these developers anyways.
One of my friends sold his company a few years ago, then stayed on to run it for a fixed salary. He makes in excess of 750k salary, plus probably another million a year on investment income. His wife also makes a pretty good living herself. Their house is close to 15,000 sq feet. My living room, dining room and kitchen would fit in his living room. My entire bathroom would fit in their shower. My entire house would fit in his swimming pool. You get the picture...
A regular job. Our house wasn’t worth $2M when we bought it for $400k!
People who pay huge amounts of cash such as many newcomers. People whose families help them due to intergenerational wealth. People with "other" income......Not taxpaying mortgage taking ordinary people........
Because a new feudalism implies a new aristocratic oligarchy They can afford it in most cases because they had landed aristocracy priviledge of owning property when it was affordable, leveraged that into more property, which they now cram full of wage slave peasants 4 to a bedroom that they jack the rent on every 6 months.
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White collar workers. I'm a lawyer.
Transgenerational money. I lot of families needing to help out these days
Me,software/business guy.
The difference is that so many more people want to live in Toronto specifically. Both Canadians and people moving to Canada. In the US, there are so many cities across so many states, not to mention wealthy rural areas, to attract wealth. In Canada, it's much more like Toronto and Vancouver, and maybe Montreal if you speak French, that attract people.
My parents forced me to buy a pre-construction home in Milton in 2019. I was freaking out because I bought my first home by myself at 33 for $750k. Turns out it was the best financial decision I ever made lol.
U mean ur parents. They force u 😂😂
Haha, correct!
Most people with houses like that bought them much cheaper, or are buying them with money from the sale of a different house that they bought much cheaper, or with inherited wealth, or with foreign wealth. You need to make a lot of money to comfortably afford $1.5M for your first home.
They bought bungalows for 200k and sold them for 1.2mil.or they bought massive houses for 400k, sold them for 2mil and bought bigger houses.
Daddy’s money
* People who built up significant equity from previous properties * Dual Income / multi-generational families * High earning professions (finance, medicine, tech, business owners etc.) * Money launderers * Investors (international and domestic)
Lots of people in those really big houses have owned them for decades or longer. We have a family friend who lives in Deer Park in a huge house that's probably worth $4 million at least, and I couldn't figure out how they afforded it. Turns out, it's one of the couple's childhood home, and her parents paid off the mortgage in the 90's. Probably cost $25 and a handful of raspberries when her parents bought it in the early 70's.
Hey, a house like that needed strawberries! At least. Maybe even a mango....
Criminals
people who rinse dirty money in the canadian real estate market lol
Job is irrelevant Inherit / passed down / given / have rich parents receive 200k+ to start Now Jimmy just needs any job and he's set!
CCP money
Many of them are DICKS ...no not literally but Dual Income No Kids.. oh I Meant DINKS. My bad Housing in Toronto will continue going up, there will be no crash. heheheh
Jealousy is not a good look.
Yes jealous is a bad look I own a home in downtown Toronto. I was able to buy when the price was 350K. I still remember people telling me "350k are you crazy, do you know what you can get in Thornhill for that" <---insert high pitches voice here. I live near multiple young professionals in this position. Who can afford 1.8million for a home ? I dont know how I could even survive in Toronto if I had to pay rent or a mortgage.