The Bragoniers are one of many Canadian families who’d have a hard time affording their own homes at today’s prices — or would find themselves priced out completely.
In February, the average home price in Canada was $816,720 — up 20% from the year before, according to the Canadian Real Estate Association.
In the Greater Toronto Area, prices rose 35% in the same time period, with the average price now sitting at $1.34 million.
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A new generation of condo owners
Greg DeCaire, a production administrator in Toronto, was approaching 30 and decided it was time to have his own space.
He began his search last year, knowing that he wanted to live downtown. He ended up getting a studio condo in Toronto’s west end.
DeCaire reasoned that these condos, especially in the era of remote work, weren’t as highly sought after as traditional homes.
“I also had my thoughts on that as things reopened, hopefully the demand for anything in the city goes up,” says DeCaire. “So if I were to choose to rent out this place, or to sell it in five years, maybe it would be worth more.”
That’s not to say it was an easy find. He bid on 30 units before finding his current space. One other studio in particular ended up going for $710,000.
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But what about young people like DeCaire who weren’t ready or able to buy before the latest surge?
In contrast to the Bragoniers — who were also 30 when they bought their Mississauga home — DeCaire says the vast majority of his friends haven’t bought homes yet.
“A lot of people are finding that they can't ‘outsave’ the market increases,” says DeCaire.
Environment vs. affordable housing?
Frank Clayton, senior research fellow for the Centre for Urban Research and Land Development at Ryerson University in Toronto, says the problem isn’t exactly a shortage of available housing. The bigger issue is the type of housing Canadians want.
Most first-time buyers like DeCaire don’t mind buying an apartment or condo for their first place. But Clayton says usually once people add a dog or a kid to their family, they’re going to want what he calls "ground-related housing" — a single detached home or townhouse.
The issue with that is space. The amount of space needed to keep up with the demand for single-detached housing is next to impossible to find, says Clayton. This issue is amplified in the Greater Toronto and Hamilton Area
“And the bottom line is that demand is going to continue to be strong,” says Clayton.
The only solutions he can suggest are fairly radical ideas he doesn’t actually advocate: reduce immigration and toss out environmental priorities, like anti-sprawl rules.
With fewer new families competing for homes and a carte blanche to develop in the Greenbelt — the area around Greater Toronto that the province has protected from development — Ontarians would quickly see supply catch up with demand. This would then lower house prices substantially, Clayton says.
He doesn’t advocate such an extreme approach, but he argues that, to some extent, policymakers have to choose one or the other: the environment or affordable housing.
“If society agrees that house prices don't matter, because protecting the environment is the only thing that's important in life, then we're going to have very high house prices,” says Clayton. “But if they want to have affordable housing and protect the environment, they can't do it.”
Time for a new attitude?
With the announcement earlier this year that the federal government has committed $2.5 billion to create 10,000 new affordable housing units across the country, more housing will be available over the next decade.
But not everyone thinks more construction of single-family homes on undeveloped land is the right solution.
What needs to change is our views on housing, says Orit Sarfaty, the chief program officer for Evergreen, an organization that advocates for sustainability in Canada’s cities.
One innovative type of housing that’s been growing in popularity in major cities are laneway homes. These homes are typically smaller and built in the backyards — near the laneways — of existing homes.
This alternative housing solution is more than a decade away from being a viable option, Sarfaty says — though she adds planners are excited about and inspired by creative housing solutions.
If city dwellers opened themselves up to more dense options like multi-generational homes, apartments and non-traditional housing like laneway homes, there would be far less competition for the single-family homes, Sarfaty argues.
“This image of owning your own home has to be something that we need to question,” she adds. “Think about how old school that is: I have land, therefore I am. We are so beyond that.”
But it’s not just a matter of the environment. Sarfaty says that what allows people to buy into dense housing options are the amenities urban neighbourhoods offer: access to parks, proximity to entertainment and cultural attractions, as well as shorter commutes.
Losing access to those perks for the sake of development would make city life far less vibrant.
“Even if I didn't care about the environment, I would still want to live in cities,” says Sarfaty. “I get to walk down to the [Royal Ontario Museum] … when I'm in the mood to go for sushi, it's a three minute walk.”
“I would give up a lot just for that luxury.”
Homeowners aren’t necessarily reaping the rewards
For the Bragoniers, their perspective on homeownership has changed over the 30 years they’ve owned their home. Back then, buying your home was one of the only ways to build your household’s net worth. But that doesn’t mean it was the most efficient.
“If we had taken our original $30,000 deposit, and put it in an investment vehicle 30 years ago, and then continued to pay the equivalent of our rent … we might actually have got a better return than what we got on the house,” says Dwayne.
However, he adds, there were no robo advisors back then. There were also limited investing options for those with just $30,000.
Beyond the money aspect, the Bragoniers love watching their kids prioritize experiences like going out to dinner, travelling on a whim and taking in all a city has to offer. If their kids were coming of age in 2022, the Bragoniers agree they’d struggle with giving up those perks for the sake of buying a home.
As for DeCaire’s investment, he hasn’t been closely watching the market since he bought it, but he does know his home has gone up in value over the past year. But it’s not doing him much good either way.
“It's not like someone shows up at your door and goes, ‘Hey, congrats, your condo is worth $70,000 more, here's a bag of cash,’” says DeCaire. “You still have to sell it and then live somewhere else. And hey, guess what, everything else is crazy expensive.”
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