Toronto Real Estate: Will I ever own a home?

Houses in Canada are made of money

Last fall, a quarterly housing report happily chirped that the average detached house price rose in Toronto… to $935,122. Semi-detached homes declined to $667,178, townhouses stayed stable at $503,349 and condos went up to $394,225. [Source]

My response?
Could my eyes roll any more?

I’m a Toronto girl, born and raised in a city where the ‘new normal’ is for the average house price to be a minimum of 4X a family’s yearly household income. Not that I really knew any of this until a few years ago. In my early twenties? I was BLISSFULLY UNAWARE. I was more concerned with the coolest new restaurant or bar, and not exactly tethered to Toronto real estate prices or trends. But as I reached my late twenties, (and my friends started buying!) I swiftly realized that the housing market was one of the most popular topics of conversation within my social groups. Instead of talking about Game of Thrones, we were all talking about real estate. Where to buy, when to buy, how little to put down, how much to put down, where to move for affordable housing, and even, drumroll please, if we should bother buying at all!

So, why not move? I’ve visited other cities in the world, but all the ones I feel strong attachments to are just as bonkers when it comes to real estate prices. (Vancouver and San Francisco, represent!) So what’s a girl to do when she wants to be in the thick of things in an urban environment, but can’t afford to buy? She rents.

Personally, I’ve never subscribed to the notion that renting is ‘throwing your money away’. If I lived in my own condo, I’d have condo fees on top of my mortgage fees, if I had my own home I’d have to take care of all matter of maintenance and renovations, from new windows to broken pipes and more. In the past year I’ve watched my landlords have to deal with new windows, doors, roof tiles, and that’s just to keep the house standing! While it may be a long-term investment, home ownership is definitely not cheap. I’ve played with a few rent-or-own calculators and at my current income level, it will take quite the leap for home ownership to be a lucrative choice.

That said, I truly wish we had another long-form census to analyze, because in 2011 Toronto had the highest average monthly shelter cost ($1,366) in the country and I’m sure it’s continued to rise since then. This includes home buyers AND renters, and luckily? I’m nowhere close. Currently I spend less than 30% of my net income on housing and it’s working out rather well. My commute to work is about 60-70 minutes if I walk, 45-60 minutes on public transit (I know, Toronto is ludicrous) or 20-25 minutes on my bike! In my neighbourhood I have a library, grocery stores, several transit options, restaurants and an LCBO within walking distance. I can save a minimum of 30% of my income at this rent and put my money aside for something in the future. But if I wanted to own in my area? Semi’s are going for upwards of $600,000, and condos are floating around $350,000 and higher. Blech!

But that doesn’t mean that all rentals are created equal, while I do fairly well with my place, I have a lot of friends who, in my opinion, are getting hosed with their rents. But at the end of the day, it can be a really affordable alternative to owning… as long as you’re smart with your choice of rental.

For years we’ve heard the rumbles that the Toronto real estate bubble will pop, but if this market is anything like Vancouver, I don’t expect to see that happen. But what to do in the meantime? I work in communications and digital media, and there aren’t too many convenient hubs for that kind of industry OTHER than major cities like Toronto and Vancouver. And I don’t WANT to move away… at least, I don’t think I do.

With all that said, I do have a desire to own… someday, so that explains the many late nights spent clutching a glass of wine and surfing for ‘fixer-uppers’ in the East End. While I still don’t know exactly if I want to take the plunge in this market, it doesn’t hurt to do a little window shopping in my spare time while I figure it out.

What are your thoughts on home ownership and prices in Toronto? Will it ever drop? Or are we just the newest permanent member of the ‘completely unaffordable cities’ club?

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