Eight interest rate hikes in less than a year have left thousands of Canadians feeling like homeownership is out of reach for now — and maybe even forever.
The benchmark rate, which sits at 4.5 per cent and has pushed borrowing costs up, is eating into prospective buyers’ budgets and leaving many stuck in a tight rental market.
Rentals.ca found the average national rent hit $1,984 in February, an almost 10 per cent rise form the same time last year,while the Canadian Real Estate Association said the average national home price totalled $662,437 last month.
From single parents on the hunt for a place to raise their children to millennials just wanting a rental that won’t cost most of their salary, these are stories of how Canadians are being priced out from coast to coast.
‘I didn’t end up with a home’
Average Saint John home price: $250,664
In New Brunswick, the high interest rates made 29-year-old Lauren Fitzgerald dramatically alter her home-buying plans.
The Saint John-area physician support worker, who works a second job as a waitress, made it her goal in 2020 to buy a house in her nearby hometown of Rothesay. At the time, she moved in with her parents and a year later, with her savings and a $250,000 loan, she began her search.
After nearly two years of weekly open house visits, watching the interest rate double, and the “heartbreaking” experience of being outbid on a 1,000-square-foot home that she had fallen in love with, Fitzgerald decided she had to change plans.
“I even went above the asking price on that home, though not by much because I couldn’t afford to. But I actually cried over that one,” Fitzgerald said of the Rothesay home, one of multiple properties she bid on that were sold over asking price.
After that, she began looking into buying land instead.
On March 8, Fitzgerald closed on a 10,900-square-foot lot near some of her favourite hiking spots, right next to the Rothesay home she had lost out on.
“I used the money I had saved for a down payment. And hopefully I’ll be able to get a loan that can build me a nice 1,000 square foot house,” she said.
“So I didn’t end up with a home, because as a single woman I couldn’t afford to.”
Fitzgerald said despite the frustration of the experience, she is happy to be moving towards having a home of her own.
“I’m a landowner now. So there was a silver lining for me.”
— By Lyndsay Armstrong in Halifax
‘It’s just wild’
Average London, Ont. rent: $1,998
Average London and St. Thomas, Ont. home price: $613,916
For the last two months, Kate Simpson has been looking for a two-bedroom rental apartment for herself and her two children in London, Ont.
The 27-year-old has been staying with her parents since moving to the city with her 10-year-old daughter and four-month-old son after leaving an abusive relationship in Guelph, Ont.
While she once had dreamed of buying a home, Simpson said that’s not currently in the cards.
“It would be nice, but the way that it’s looking with the economy … I don’t think that’s a possibility, especially in London,” she said.
Simpson lived in London three years ago, when she paid about $950 in rent for a two-bedroom unit. A similar unit now costs about $1,500 a month, she said.
“It’s just wild,” she said. “Even having a two-bedroom apartment is like we would be technically underhoused because I would be sharing a room with my son.”
Simpson, who worked as a personal support worker before getting pregnant with her son, said finding housing for her family would make her feel stable and secure so she can look for a job.
“Honestly, just to find somewhere safe for my children and I to rest our heads,” she said.
“I would love to just be able to work again and take care of my children in a peaceful place and not feel I’m relying on everybody else to do that for me.”
— By Maan Alhmidi in Toronto
‘How are you going to compete with that?’
Average Toronto rent: $2,838
Average Greater Toronto Area home price: $1,095,637
Sheeren Anis has run a tech business since 2015, but in recent months, she found herself eyeing a job at Boston Pizza.
“They were like why are you applying for this job when you’re overqualified?” she recalled.
“But that’s just the lay of the land right now.”
The 30-year-old startup founder, who lives with her parents in Barrie, Ont., was applying for the pizza chain gig because, despite decent savings, she found herself struggling to get into Toronto’s rental market. (Anis won’t buy right now because she feels the market conditions aren’t right.)
Landlords weren’t comfortable renting to someone whose income isn’t uniform throughout the year, she said, especially when the heated rental market has more than enough steady earners prepared to offer more cash to snag a place.
“If a unit is going for $3,000 a month, one bedroom, one bathroom … they’re willing to put up $3,500 a month and one-year rent upfront,” said Anis.
“How are you going to compete with that?”
On one occasion Anis, decided to make a similar offer only to find out the landlord was out of the country and not prepared to rent their place after all.
In frustration, Anis bought a $7,000 Cartier watch, thinking “at least you have an asset on your wrist.”
— By Tara Deschamps in Toronto
‘I’m going to wait until the bubble bursts’
Average Montreal rent: $1,848
Average Montreal home price: $562,874
Alexandre Lagreou has been thinking about getting into Montreal’s real estate market for about four years.
“I would love to be able to buy now, but I don’t think it’s a good idea with what is coming,” the 33-year-old photographer and urban farmer said.
“I’m going to wait until the bubble bursts.”
He said he is looking to purchase his first property in the city but is also considering the option of buying further away, in the suburbs, and perhaps even flipping a home.
Lagreou, who rents in Montreal’s Mile End neighbourhood, also worries that even if he finds a property within his budget, he will be outbid.
“When I spoke to the real estate agent, she told me that there are still so many bidding wars that the price would be driven up.”
In order to get into the market, Lagreou said he is now open to the idea of buying with a friend.
“Although my plan was to buy alone, buying with a friend would allow us to have access to something a bit more interesting, like a duplex or triplex.”
— By Marisela Amador in Montreal
‘I’m excited to leave my parents’ house’
Average Calgary rent: $1,862
Average Calgary home price: $521,896
Landon Roett’s buying power was significantly reduced when interest rates started climbing last year.
The 27-year-old said his loan approval based on his salary fell to $300,000 from $500,000.
“That has hurt me quite a bit, as well as the understanding of what my payments would look like,” the digital marketing specialist said.
Roett, who lives with his parents, has been actively looking to buy a two-bedroom condo in downtown Calgary for at least two months.
However, he said it’s just been a series of failed competing offers in a high-demand and low-inventory market.
“I think I had to manage my expectations on the quality of properties that are out there and what my price point holds for quality,” he said.
So long as its near his office, Roett is now also looking at one-bedroom units.
“I’m excited to leave my parents’ house. And that has been the main driver for why I’m looking for the place.”
— By Ritika Dubey in Edmonton
‘We decided to move a little bit slowly’
Average Vancouver rent: $3,120
Average Greater Vancouver Area home price: $1,219,919
For the past six months, Vancouver lawyer Alex Bres and his wife have been looking to buy a home to accommodate their growing family.
The couple, who have an eight-month-old baby, said their downtown Vancouver rental isn’t big enough, nor does it offer the permanency they crave.
They are keeping an eye out to buy a larger property in British Columbia’s Lower Mainland, one of Canada’s most expensive housing markets.
“We decided to move a little bit slowly just to get a sense of what’s available on the market, as well as keeping an eye on what the Bank of Canada is doing in terms of what sort of mortgage rate we’re being quoted by various financial institutions,” Bres said.
As a dual high-income couple, Bres said they have the advantage of biding their time.
“We’re fortunate to be in a position to afford a home in this market and I know not everybody is in that position,” he said.
In terms of housing supply, Bres said “we’re not disappointed by the options available, but at the same time not blown away.”
The couple is now weighing moving farther out of the city in the hopes of finding something bigger and cheaper, while trying to keep commute times under an hour.
— By Darryl Greer in Vancouver
Average rental prices came from Rentals.ca’s latest rent report, which does not include data for Saint John, N.B., and average home sales prices came from the Canadian Real Estate Association’s February report.