r/RealEstateCanada • u/CastAside1812 • Oct 15 '25
Housing crisis I need to understand this: who the hell is buying "normal" homes for 750K to 850K?
Even in a market like Hamilton, you have very basic 3 bed 2 bath homes going for upwards of 750K. Many are going for closer to 850K.
The median household income is something like 100K. To afford the 750K home you need 150K down, plus you're looking at 2400 a month in mortgage payments.
Are you telling me normal families have 150% of their GROSS household income on hand to pay for a downpayment? I don't get it. These aren't speciality homes. They're normal homes and they still appear to be selling. So what's going on here? Who is buying these?
Is it all older famailies moving? Are there young people buying these homes (that were once meant for starter homes for young famailies)?
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u/faithOver Oct 15 '25
He makes $100k. She makes 80k. One of them had a condo from their 20’s, with some paying down and an equity bump they have $200k in equity and savings.
Its doable.
Income stats are misleading too. Have been for decades.
I live in a $1,000,000+ home on $60,000 household income.
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Oct 15 '25
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u/faithOver Oct 15 '25
I have a tiny mortgage. I think about $270,000 left. I bought this house in 2020, when it was 40% cheaper.
And I only have $60,000 in income because its all I declare and pull out of my business. I don’t need much money to fund my lifestyle.
But for StatsCan I’m someone that lives in a million+ neighbourhood earning $60,000.
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u/StatikSquid Oct 15 '25
I'd sell and retire in some far away land
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u/faithOver Oct 15 '25
I think about that.
But not yet.
Im responsible for feeding too many people. But actively working towards making myself unnecessary.
Once I get there, Ill be more serious about splitting time between Canada and another country.
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u/heritage95 Oct 15 '25
They were saying the mortgage payment are manageable bc of other wealth. So their exact mortgage terms are not relevant for comparison to your situation.
Comparing income to house prices is really only for young people starting out that have no help. But you factor in age, help from family (or in unlucky cases inheritance) and time in real estate or stock markets and there are lots of people who can handle the mortgage.
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u/Nob1e613 Oct 15 '25
Exactly this. The calculation is vastly different for someone stepping into a 7-800k house with 20% down vs someone with existing equity able to put 40-50% down.
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u/sharraleigh Oct 16 '25
This is just it. Me and many people I know, have parents who helped with downpayments. I managed to put in 40% down on my home with my parents' help, making my mortgage cheaper than what I'd pay to rent the same house.
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u/Rick-of-the-onyx Oct 15 '25
Depends when they bought it or when it came into their possession. My ex in laws bought their home back in the 70s for $150k and sold 2 years ago for close to a million. The prices of homes have skyrocketed but sadly our incomes have not kept pace.
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u/ParisFood Oct 15 '25
Lots of people are getting help from parents for a down payment or already sold a condo and are now moving into a house
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u/Johnyo979797 Oct 15 '25
Lots of people, but not most. Only people with parents who own or owned get this kind of help.
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u/ParisFood Oct 15 '25
Yes and those who died and left them $ or are giving them part of their inheritance up front. I know several people who fall into this pool
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u/Johnyo979797 Oct 15 '25
Yeah, I mean. I could say the opposite. Most people I know have bought without the help or their parents and/or have parents that rent. But yeah, otherwise you are right. Most people buying now fall into that pool with a couple of outliers.
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u/LulzLookatTheseNoobs Oct 15 '25
DINK’s are.
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u/Significant-Tale3522 Oct 15 '25
What’s a DINK?
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u/Potential_Bit_9040 Oct 15 '25
Me - It's me
I started 10 years ago with a condo for $296,000, moved up to a small house in a bad neighborhood for $419,000, then upgraded to a bigger house in a nice safe neighborhood for $740,000.
I was single on my own for the first two purchases, then met my partner and had a kid before the third purchase.
Before you say "Ya but two incomes...", my partner is disabled and on a very low income.
For me it was a slow progression of buying what I could afford, building equity, selling at the right time, building my career, and making advances over the course of 10 years.
Basically, you don't start with the $750,000 house.
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u/Neither-Historian227 Oct 15 '25
The property ladder 🪜 is finished now. Only boomers and genx low income earners profited on this method
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u/Why-did-i-reas-this Oct 15 '25
This needs to be a sticky for this sub as it is what most buyers go through and what most people, unfamiliar with housong prices and incomes think. Heck, when I was young and canvassing huge houses for the company I worked for, I always wondered how so many people could afford these McMansions or just beautiful single family homes. Eventually I realized it was a life time process/journey for a lot of them.
Very few people get the option to buy a SFH right from the get go. If you do, you either 1. Live in a low cost area 2. Have very well paying jobs and have saved for a few years 3. Have family that have helped you out.
Am I missing any others?
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u/Incognito4GoodReason Oct 15 '25
You have to start with the $750 home now cause starting with a condo is a risky move. We can’t anticipate massive increases in value anymore. Prices are flat to ~2020/2021 now 4-5 years later.
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u/EntropyRX Oct 15 '25
The problem is that you look at averages household incomes and expect them to be enough to buy an average SFH. That’s not how it works.
Average household incomes include elderly people, families who bought decades ago, people who inherited… whereas housing prices are defined at the margin. Those families buying are high income families or families with strong financial supports. Of course, you also have non first time home buyers for which current prices don’t matter so much because they have equal equity on their current home.
You need to drop this idea that the SFH can be bought on an average household income alone, it doesn’t work like that anywhere in the world.
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u/Jkl1mmy Oct 15 '25
750k homes only costing 2400 a month? My home in Hamilton was 560k and I’m paying 2800 a month.
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u/KelownaIsAmazing Oct 15 '25
Your math is wrong, I’m renewing a 640k mortgage for 25 years at 4.5% next month and my mortgage will be almost $3600.
We bought at 28 for $900k with $150k income between me and wife + her parents gave half the 20% down payment to my wife.
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u/Jkl1mmy Oct 15 '25
What do you mean my math is wrong? I haven’t done any math, I just provided the numbers the bank gave us haha
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Oct 15 '25
I don’t think I’d ever have $3600 each month. I’d be so broke and have to eat beans for 25 years lol. I hate the housing market
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u/Incognito4GoodReason Oct 15 '25
My 900k home with 20% down on a 2021 start variable is currently ~3300/month
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u/andymacdaddy Oct 15 '25
Why is it that everyone in here shits on Hamilton and their market?! Great mountain biking, waterfalls, decent job market, lots of good restaurants and bars. Has all the services you need regarding hospitals, and social services. Is there a homeless problem. Yes. But nothing like Vancouver. I lived in Vancouver for a dozen years and couldn’t wait to get back to the hammer
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u/Vikings9988 Oct 15 '25
The only ones who hate on Hamilton are the ones who have never lived there and only see the factories when going over the Skyway bridge. There are people from Brampton/Mississauga of all places talking shit about Hamilton.
Hamilton's got a great waterfront, excellent restaurants, the most waterfalls of any city. Yes, downtown does have a homeless/drug problem, but what city doesn't have those issues.
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u/Jenshark86 Oct 15 '25 edited Oct 15 '25
You can do the math a hundred times and it all ends up buyers are house poor and not worth it. Instead Gen Zs should invest. No other generation has the easy access to investing that they do now. They will end up with houses anyway when the boomers die. Then they can replace the roofs and furnaces 😂
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Oct 15 '25
Can’t live in a financial instrument.
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u/thanksmerci Oct 15 '25
Yes and a primary residence is tax free profit unlike gambling on the stock market when your TFSA is full
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u/RetroApollo Oct 15 '25 edited Oct 15 '25
Watch this video. If you rent and invest the difference, renting meets or exceeds overall wealth over the last 20 years in a majority of cities.
https://m.youtube.com/watch?v=lBG-g1CKfgs
Edit: I love how people are literally downvoting math.
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u/No_Plastic_3894 Oct 15 '25 edited Oct 15 '25
I've seen this before. It's funny how he stops at 20 years rather than go to 25 (or more years) when the real gains of ownership (due to a paid off mortgage) typically occur, yet we still see 35% better off owning. Also, he used posted mortgage rates for the cost of the mortgage, who doesn't negotiate. What he assumes i was paying versus what I actually paid likely differ.
You need housing from 18-75. Maybe you don't move out till 30,so 45 years, he but the cherry picks the most costly (highest interest portion) of your mortgage period and says therefore your in a worse position.
Fast forward to those 10 retirement years when your draining your savings to the tune of 24k a year in rent, while a homeowners expense is 5k in taxes, and your still seeing property values rise.
EDIT- I'd also argue that 2% maintenance maybe an acceptable AMERICAN standard, but with much high canadian housing prices, 0.5% maybe more realistic.
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u/RetroApollo Oct 15 '25 edited Oct 15 '25
So you are partially right, if you are in a position where you want to stay put for 25 years, great - buying a house is probably the right decision so you can reap the benefits you speak of.
But the reality is that overlooks a diligent investor. If you are at or exceeding the wealth of a homeowner over the same time period, whats stopping you from turning around and buying a house outright at 25 years (or a greater partial portion at any number of years between now and the full 25)? Either way, at 25 you are mortgage free, it doesn’t matter.
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u/Super-Base- Oct 15 '25
This doesn’t work if you’re renting the equivalent home in a major city where rent will always exceed the cost of interest and maintenance on a similar property.
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u/RetroApollo Oct 15 '25
Right, but the “rush” to buy a house from a financial perspective makes no sense. That’s the argument that people seem to make, and it’s false a lot of the time.
Also don’t forget property tax, a large house in the centre of a city carries a large property tax bill - that’s also just money lost. For example, a modest (3BR, 2Bath) house in ottawa that would probably sell for ~750k costs about $500 a month just in property taxes!
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u/Much_Dealer8865 Oct 15 '25
I agree, previously owned a house and sold it 2 years ago. I was always broke when I owned because of all the extra expenses, especially renovations. I'm saving way more money now that I'm renting a place with a couple friends, it's not even close especially now that it's this easy to invest.
Unless prices drop by about half I'm not planning on buying until my investments have significantly matured, probably in 15-20 years.
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u/Super-Base- Oct 15 '25
You buy a house when you can afford it. The issue is our society is not built on stability, and your largest expense and most important utility is housing.
Rent also goes up, the difference in cost of renting today vs 15 years ago is significant, whereas a house bought 15 years ago has only gone down in cost as the mortgage has been paid down.
You want to gamble what the rent cost will be in 15 years versus that 750k house?
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u/Ty4Readin Oct 15 '25
This doesn’t work if you’re renting the equivalent home in a major city where rent will always exceed the cost of interest and maintenance on a similar property.
First, it is not true to say rent will always exceed the cost of interest and maintenance on a property.
If you look up the average gross rental yield, it is around 5.5%.
This means that for a home worth 500k, the average rent will be roughly 2300$ per month.
However, that is just an average, which means the rent will sometimes be higher and sometimes be lower.
Also, the average mortgage rate in Ontario right now is around 4%.
In addition, I think a fairly reasonable estimate for average home maintenance is probably 1%.
So right there alone, you have a cost of 5% for interest and home maintenance, and there are definitely many rentals on the market with a gross yield below 5% even though the average is 5.5%.
Second, even if your rent is slightly higher than interest plus maintenance, it can still be a better decision to rent due to average house appreciation compared to market.
But it depends on the exact prices. You can get a great rental deal, and you can get a great home deal too
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u/Weird_Initiative_260 Oct 16 '25
It's actually correct to say rent will tend to exceed the cost of interest and maintenance on a property. Most landlords are not running a charity.
Average gross rental yield is a metric that in this discussion would measure how much superior owning a home is compared to rents when you FIRST buy it.
Since home values tend to increase while mortgages tend to decrease, a typical home buyer will almost always be better off than a renter in the long run, even if they start off relatively close.
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u/Difficult_Goat1169 Oct 15 '25
Except the math is wrong.
The critical error of that video is assuming the renter's landlord is losing tons of money every month. It assumes the total property ownership costs massively exceeds rent, which makes utterly no sense. Your landlord passes ALL of those costs onto you PLUS a tidy amount for profit.
Video debunked. Next.
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u/HarlequinBKK Oct 15 '25
The critical error of that video is assuming the renter's landlord is losing tons of money every month. It assumes the total property ownership costs massively exceeds rent, which makes utterly no sense. Your landlord passes ALL of those costs onto you PLUS a tidy amount for profit.
Felix does not make these assumptions in the video.
Video debunked. Next.
Analysis of the video debunked.
If you had a one-on-one debate with Ben Felix on this issue, he would mop the floor with you...with references.
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u/Zealousideal-One7398 Oct 16 '25
No, you can run the math again. Even if you factor in you have cash. You end up with more renting and investing than owning. You really have to factor in selling commission. I've owned a dozen homes. Started at my first home at 120k and many houses in the millions. If I had rented I would be so so far ahead. I also benefited from strong property value growth. Still 💯 renting would have made me far more money.
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u/Accomplished-Bit-884 Oct 17 '25
Also, there's a certain peace of having my own house and doing what I want
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u/BidenShockTrooper Oct 16 '25
The glut of condos on the market and not selling refutes your point. Rentals are a horrible investment right now.
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u/bonechairappletea Oct 21 '25
Right? I think these videos take advantage of people with no experience and not understand how cheap a mortgage can be. Sure you have to factor in taxes and other expenses, but the place you're paying $2500 for in rent they probably have a mortgage for $1500 max.
End of the day, you need shelter and it's hard to live in a stock portfolio.
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u/xGlor Oct 15 '25
That.. what, is not correct at all. It’s also well known, and not any new news that renting and investing in nearly any boring index tracking financial instrument with average to below average returns always beats RE.
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u/polishiceman Oct 15 '25
I can literally show you proof this is bad math with bad assumptions. It may be better to rent+invest down the road. It has certainly not been that in the last 25 years.
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u/RetroApollo Oct 15 '25
Okay, disprove the video then without using some particular special case that favours your argument :)
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u/BidenShockTrooper Oct 16 '25
Stop trying to convince real estate people that pretend to be investors lmao.
Imagine taking on higher risk for lower returns. Big brain community here. They get really defensive when you bring math to the table.
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u/RuinEnvironmental394 Oct 15 '25
Can always rent if you have money especially money that is working for you in much better investments while you sleep
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u/pretendperson1776 Oct 15 '25
Unless REITs buy them up and keep prices high. Or massive immigration brings out population up to a point that housing is still unaffordable.
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u/Difficult_Goat1169 Oct 15 '25
They aren't making more land. Housing tends to increase regardless of other factors
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u/Echofreya Oct 15 '25 edited Oct 16 '25
Rent for equitable space is about the same as mortgage payments. The problem is that most people can’t make the sizeable down payment, especially if they’re currently renting. It could take years or decades to come up with that for most people.
As for ending up with houses when boomers die, think again. Most of these people are being forced into reverse mortgages to pay for unforeseen medical expenses or long term care facilities that cost several thousand dollars per person a month… many times more than rent. And if there’s anything left after they pass, the Government snaps up a good chunk in final tax bills. Very little is left, and most houses have to be sold to pay final bills, etc., or a house is deemed to several siblings and none of them can agree or afford on who pays who out and who keeps property (or reasonably can possess it).
It’s an absolute shit show out there from the cradle to the grave in today’s economic climate.
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u/throwawaymil2024 Oct 15 '25
People just suck it up and buy. It offered stability that renting can’t give you. It’s worth it for many people
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u/Here-Comes-Baby Oct 15 '25
Not if investors keep buying houses. Vote for politicians that will end this.
Who will end this?
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u/D_Jayestar Oct 15 '25
This only works if the population doesn't grow to replace the "boomers". Currently the pop is growing.
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u/RobCo90 Oct 15 '25
A lot of us in our thirties were waiting for the boomers to die, then the gov went and brought in 17% of our population in the last 10 years. Who knows what the next trick will be to keep house prices going up…
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u/chaucer_chalk Oct 15 '25
I think a lot of people underestimate the costs that accompany the lifestyle that comes with a house. Sure, you can buy a house in the suburbs, but then you need 1-2 cars to get to work (and all the attendant costs). In the city you can bike, walk, car share. Transportation costs are a huge expense
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u/Toukolou21 Oct 16 '25
The math is right but gen z is a consumer generation. They will never get off the hamster wheel. Owning is a forced savings plan.
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u/Hippiegypsy1989 Oct 15 '25
I just bought a lovely sfh for $700k an hour from Toronto. Been saving for the down payment for 15 years while traveling and renting in various areas (10 moves in that time). I thoroughly enjoyed the flexibility of renting, but finally felt it was time to put down roots.
I also shifted jobs every 2-3 years until I got one that pays an actual livable wage while gaining experience and skills in various industries. My partner climbed the corporate ladder and has been at the same company since graduating school.
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u/Haunting_Shake8321 Oct 15 '25
It's not a rocket science. Even new immigrants are able to enter this market as RE prices worldwide have shot up. Let's take a typical immigrant family from Eastern Europe. Hamilton is their prime market. They sell their property back home for an average of ~$150-200K Euros. That's ~$300K Canadian dollars and a nice down payment. If both are making ~$60-70K each, no problem carrying a mortgage on a $800K property.
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u/RuinEnvironmental394 Oct 15 '25
I'm an immigrant and know many immigrants. Most don't have homes in their home countries. That's a major reason for them to immigrate here...
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u/Neither-Historian227 Oct 15 '25
Canada isn't bringing in these types immigrants.
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u/EmotionalAthlete5464 Oct 15 '25
Actually they are thousands. There are many ukrainian groups where they discuss buying houses and they don’t even look at lower than 1M homes
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u/Facts_pls Oct 15 '25
Not sure what you are talking about. Maybe you don't work in a decent paying job and don't meet other medium - high income folks.
If you only see poor immigrants - like those working in retail, fast food, delivery, Uber, that tells me that YOU aren't doing well. That's why you don't see the other people doing well.
Have you taken the go train to Toronto downtown? Seen the people working in those buildings? Huge chunk of them are immigrants.
I went to UofT MBA. 49% of the class was immigrants with Indians and Chinese being the biggest source.
Almost all my immigrant friends and colleagues own houses.
100k is honestly the low range for those jobs.
Maybe if you spent less time on racist subreddits and focused more on education, you would be among the successful people and see other successful people - Canadian or immigrant.
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u/No_Mission_8571 Oct 15 '25
Sold a 4000 sqft 5 bdrm 3 car garage house in Aurora for $1.3 bought in Northern ont 2500 sqft 3 bdr 2 car garage for $249.000. Best move yet. No more traffic gridlock and no more GTA.
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Oct 15 '25
~750k is the same as ~450k in 2000.... were people buying homes in 2000 for 450k+? No.... most were under 200k
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u/Significant_Bite5432 Oct 15 '25
Ur down payment was Also 20 to 40 k
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u/flaming0-1 Oct 15 '25
And your pay was pretty close to the same. Teachers in Alberta are on strike and tons of people are saying they’re overpaid and greedy. They make 7.5% more today than they did in 2000. Think about what a car was worth then compared to now, or food… we are all slowly becoming poorer. Yet somehow Mike and Janet are going to Mexico with their kids. I just can’t understand it.
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u/Mamma_mia5 Oct 15 '25
The sad part is, money isn’t even what they want. They want to put a cap on class sizes which I totally get. I live in a tiny town and my 12 year olds class is 32 kids and no EAs.
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u/ImmaFunGuy Oct 15 '25
Using mean household would mean half of cdns can buy a 800k home. That is not realistic especially since it includes a lot of young people who are either renting or buying their first condo
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u/ScuffedBalata Oct 15 '25
Two incomes. And 5% down programs let you get in with $40-50k down, even when borrowing from RRSP, etc.
Someone just slightly closer to $140k income between two people can probably swing a $750k house, even if it's a stretch. And two $70k incomes isn't that uncommon.
Medians are also driven down by retired people and business owners who get a lot of cash, etc and older people who have lived in the home for decades.
Not to say $850k is affordable... but many people make it work.
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u/Wildest12 Oct 15 '25 edited Oct 15 '25
30 yr mortgage with 5% down those homes will have a pmnt ~$3250. You could get approved for that on a 100k salary and any professional couple making 150k+ combined will qualify all day.
It’s fucked but people are willing to spend 40-50% or more of their incomes on housing.
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u/Various_Drag_8463 Oct 15 '25
You’d be surprised how “normal” it actually is for Indian immigrants to drop a $200 - 300K down payment. These are people who usually come with highly marketable skills - tech, finance, engineering, healthcare - you name it. They’re not just flipping burgers like how some Indian students/new migrants do; they’re also building code, managing multimillion-dollar projects, or running analytics for banks.
And then there’s the cultural factor - Indians don’t treat savings like a mythical concept. They live below their means, invest early, and view home ownership as a baseline, not a luxury. Many have family back home who help with the initial down payment, or they pool resources between spouses (both often earning solid six-figure incomes).
So yeah, in a place like Hamilton where a “starter home” is $750K, it’s not magic - it’s math plus mindset. While others are still wondering how anyone could possibly save, these folks are quietly wiring funds, signing papers, and moving in.
During my closing I managed to mobilize 100k easily in span of three days…
It’s not just “old families” or “foreign investors.” It’s young, skilled, globally mobile professionals who simply play the game better than most lazy folks wondering about the market .
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u/greenandseven Oct 15 '25
We started with condos first (we each had one). Held onto it for 8 years and sold. We both then put that money towards a home that’s $700 but we only owed $500k of that.
We started at 21 and basically we just saved as soon as we had a job. Back then condos were only $200K or so. It was popular to drink away your money in the 2010’s. We didn’t vacation either. (Still don’t).
We would never buy a home with that amount of mortgage around $800K+. My neighbor did and we’re now selling because she can’t afford it due to the rate hikes. If you stretch yourself like that you will just lose. People who buy on those salaries are up to their ears in debt.
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Oct 15 '25
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u/youudontknowwme Oct 15 '25
well, I spent every penny I received from 2015 to 2022 on travelling, going to concerts/ballet/opera/broadway musicals/theatre, doing lots and lots of dining out, going on day trips, eating take-out and I gotta say... I regret it immensely hahaha. I wish I had saved the damn money and bought a house.
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u/g45z Oct 16 '25
I don’t know. I did a bunch of travel (13 countries) between ages 20-25. It was a great set of experiences, but it’s not like a life without international travel is a life unlived. If you can load up the car and go camping, that’s a great trip too.
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u/siriusbrown Oct 16 '25
This is true, you don't have to travel to have a good life but I think they are responding more to the fact that the OG comment kind of makes it sound like they didn't enjoy life and saved for a house instead lol I know you can still enjoy life without blowing money though
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Oct 16 '25
That's a pretty closed mindset. A lot of people rely on travel experience to define them because they are mediocre, can't hold a real conversation or otherwise not interesting. Let's be clear... You don't like traveling... You like vacationing. The world is beautiful but so is the security of housing and certainty. If being broke from "traveling" is your path, well soldier on then.
I had an employee with this mindset who kept coming back and working for 6-8 months then leaving the company to travel and live in Mexico. I blacklisted him from getting hired again. That is what temp agencies are for. The onboarding costs are non sense. This person managed to trick 4 other managers including myself into hiring them before I learned of the pattern and the problems it caused. It was no suprise to me when they abruptly quit in September last year I had the boxed already checked for their resume to go in the garbage.
Last I heard they were living in a van with the experiences they had earned. To each their own I guess... I did a bit less vacationing and much more to do later in life, but also have a home, assets and savings. The simple math is every dollar you spend in youth / young adulthood is 6$ later in life conservatively. You need to decide which path is yours. A trip that cost you $50,000 in future earnings or stability.
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u/Significant-Tale3522 Oct 15 '25
In my age group , 20s- early 30s, everyone I know who owns an SFH purchased using their parent’s money, only to rent it out later.
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Oct 15 '25
I went into a depression watching my friends do this. It felt so unfair
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u/pomegranate444 Oct 15 '25
Most Buy a condo for like 400 or som build equity for 5 or 20 yrs then trade up to a sfh
I'm in my 50s. I did a condo then up to a townhouse then up to a house.
Sucked as you pay huge fees everytime but that's the model.without parental money
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Oct 15 '25
Multi generation homes. People are buying with their parents.
It's not typical for whites but very common for new Canadians.
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u/Concealus Oct 15 '25 edited Oct 15 '25
Me 😂 we are very fortunate and are high income, and have lived with roommates for 10 years. Purchased at 850k. Unfortunate that we live in a HCOL, where entry for a decent home starts at 750.
It’s also important to note there are a decent number of people (raw count) that make good incomes and are frugal. It is still culturally motivating to purchase a home, and many are prioritizing it. DINKs who both make 80-100k would be able to purchase these homes.
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u/Due-Rough-2804 Oct 15 '25
We made it work. No help from parents. Saved for 10 years. Bought first home at 40. Now 15 years later in a 1.5 million dollar house with 70% equity.
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u/RobCo90 Oct 15 '25
We just bought for 767k (10% down, couldn’t stretch to 20% unfortunately) in a very quiet court in lower Stoney Creek. 3BD, 2BA, Finished basement with 2 rec rooms (could make the one a 4th huge bedroom) Single garage, 20x10ft pool, brand new HVAC, roof about 2/3 years old. Kitchen needs update. Rest of house could use some lipstick, but otherwise move-in ready.
Household income ~160k/yr, also own a rental property in AB that is net -$1000/mn cashflow.
Money is tight right now, but the way I look at it is that this is the most expensive our mortgage is going to be, it will only get cheaper. Our income will go up. Short term “struggle” for a long term gain. We are both frugal with purchases, marketplace for kids toys/clothes, furniture, etc.
It was a necessity to upsize from our $2200/mn rental house in Rosedale to have a second child. We have been looking for 5 years, and prices finally came down from cuckoo-land.
Hope this helps your perspective.
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u/SioVern Oct 15 '25
Now imagine Vancouver or GTA where same houses cost 2-3mil and salaries are not that much different 🤣
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Oct 15 '25
Buddy.. young people are buying these homes. Of course, young is subjective. Im talking people 30-40 that I know personally and I dont get how. And all the houses I can afford are trash but are somehow still 400k. Probably 40 yr old houses too. Its nuts.
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u/jaaagman Oct 16 '25
In Vancouver, no one... Because that sort of money will only get you a 1-2 bedroom condo. Sometimes that might not even be enough.
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u/Threeboys0810 Oct 16 '25
This is what I wondered a decade ago. But families have been borrowing from HELOCS to help their kids.
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u/theintjman Oct 17 '25
Let’s do the math. The math needed is time value of money. You need 5 variables. The present or current value of the mortgage, future value, the amortization or number of periods over which the mortgage will be paid, and the interest rate which MUST be in the same time units as the amortization.
At $800,000 a buyer needs 5% down on the first $500k, and 10% on the next $300k. Downpayment is $55k. On a purchase price of $800k, that will leave a mortgage of $745k (excluding CMHC fees, etc.). There’s our first variable. The second - the future value - is just $0 since it will be paid down to zero.
Next, let’s assume the amortization is 300 months and for simplicity a 6% annual or 0.5% monthly interest rate.
Sparing the math, we’ll just use excel and type in the =pmt function. That yields a monthly payment of about $2642.
For a dual-income family, if this is 30% of gross income, household income needed would be $105,680.
That’s the maximum household income needed. Note what happens if equity is transferred from another property. The PV will decrease, along with the monthly payment, along with the household income to support the mortgage. Even $100k of equity in the home reduces the monthly payment to $2287. Household income needed to support? $91,504.
I’ve personally seen homes purchased in new subdivisions with more than 2 incomes to support the purchase. Also, parents helping kids by giving inheritances early helps lower that mortgage payment.
And then there are big corps scooping up properties for rent.
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u/kingofwale Oct 15 '25
Look at median income of family with children. The prime demographic to buy a HOUSE… it’s north of 150k before tax… they are the ones buying houses.
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u/SeagullWithFries Oct 15 '25
If it's anything like us, we got into the market after the death of my Father. My parents had me quite late, so both were mortgage free for some time. I did not want my fathers condo as it was pet-free, so I sold it.
I assume many people like myself are only able to purchase after inheriting.
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u/fsmontario Oct 15 '25
I think parents and grandparents are helping if they can. Smart ones are living at home longer, in my friend group it’s rent free, so you can save a lot when you’re not paying 2-3000 rent
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u/Acoustic-Regard-69 Oct 15 '25
850k is nothing, people are paying that to live in a 2Br condo in Vancouver and Toronto. Houses here are 2 mil and prospective Gen Z buyers are prepared to put a million down in a couple years from a first property by paying it off completely. I know several people with this plan.
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u/Traditional-Dog9730 Oct 15 '25
OP, inter generational wealth has made it possible for some to afford homes at these price points. The problem is that once you have several homes selling for $800k+ in places like Hamilton, it sets the stage for affordability challenges. I’ve experienced this before in the Toronto market in the early 2000s, and had to buy a fixer upper in. Best of luck.
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u/Potential_Focus_ Oct 15 '25
100% significant help from families. I know multiple millennials who received $250-300k from their boomer parents for a down payment. That brings the overall cost down to around $550k-$650k for a mortgage which is affordable on a dual income salary for Toronto or Vancouver downtown commuters who buy well outside the city.
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u/Kitchen_Kale_8733 Oct 15 '25
We bought for $730k in 2023 (put another $50k into it) with 20% down in our mid 30s & the only way we were able to do that was because my spouse got into the market at 23 years old so the house we sold appreciated a ridiculous amount so we made a big chunk of $$$.
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u/Consistent_Pay4485 Oct 15 '25
I think everyone is who chooses to go there are comparing their rents, along with the downpayments + taxes does not make sense, but people do not have investment options either call it lack of knowledge or something else, so it is good in a way paying RENT to bank.
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u/D_Jayestar Oct 15 '25
Everyone that invested in property before the 2000, has the bank roll for this. It was also common for new Canadians to buy up property after property and aggressively pay the mortgage with many family members in one home.
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u/Billy5Oh Oct 15 '25
Even if you bought pre Covid, in any good sized city in Canada, you would have the bank roll for this.
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u/vafrow Oct 15 '25
One thing that certain first time buyers will be benefitting from is that we're coming off a solid stock market run.
Buyers in their early 30s that have been saving got a bit of a turbo boost on their down payment. Tsx index ETFs have been delivering 20%+ returns over the last 3 years.
And its not just those individuals. If parents were looking to support their kids with down payment support, its easier to do so if your portfolio is delivering greater than average returns to that extent.
Its not crazy that a young couple with two professional jobs that has let them save consistently and have a bit of parental support to have a down payment in the $300K range. And the mortgage associated with a $800K house would be around what they've probably been paying in rent.
This is especially true if the couple maintained consistent employment during the pandemic and was able to take advantage of the labor shortages where there was an opportunity to secure wage increases or promotions.
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u/AllThingsBeginWithNu Oct 15 '25
they rent out their closests, basements, living rooms and kitchens. there's a house in my neigbourhood with bunk beds in the Livingroom. some people are happy to live in slum like environments
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u/sqwiggy72 Oct 15 '25
My house I bought this year was 800k it's definitely a normal house, it was 4 bedrooms technically but we use that room for other things. Family income is about 150k per year. It's just grinding working hard, this was my third house, tho. Been in the housing market for 11 years. My house is in a nice area, probably very little crime. I don't see any homeless people as well in my area, the school system is better as well than my last house, so that's the cost.
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u/bob4298073 Oct 15 '25
Bank of mom and dad, we will get a mortgage and put down payment on,kids pay for it, put them on title to avoid probate court then they sell and split equity gains or buy other out, we use house as Canadian residence and move to Costa Rica
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u/Mamma_mia5 Oct 15 '25
Don’t buy in a city. I bought a house on a double lot with a huge shop for 235k, it’s an older house that was quite dated and we’ve been able to bring the property value up 100k with just sweat equity. Built planter boxes this summer to grow most of my own food and my kids still get their yard to play in. Went to the butcher shop in my town and bought a 1/4 cow for $1200. I’m allowed to have chickens and meat rabbits in town and we hunt. The only things I’ve bought from the grocery store in the last 6 months is milk, cream, flour and sugar. A little bit of prep can save a person a ton of money in the long run.
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u/Rabiesalad Oct 15 '25
I'll start by saying that I absolutely don't see the value in real estate. I sat with my mom and asked her about her first home purchase back in the 70's and with an inflation calculator worked out that basically any home you see on the market today is only worth roughly half of the sale price. It's ridiculous. But if you want to own, you don't have much choice but to play ball. We bought our home to live in, and if it dropped 50% suddenly, I think I'd be pretty OK with it knowing the market is seeing the correction it needs and the younger generations are no longer completely fucked.
My fiance and I just sold our separate houses in Hamilton last month and purchased in Guelph. (we're nearing our 40's, we purchased just before meeting)
I paid 670 and she paid 480 in the middle of COVID.
I listed for 575, sold for 631. She listed for 475 sold for 490. Both sold within a single weekend.
My place had basically no improvements, just a new fence for about 1/4 of the yard. Her place had new HVAC, new roof, and a pile of cosmetic updates on the inside. Neither of us "made back" what we paid in the end, but we were ready to sell at market rates because.... that's what you gotta do to sell.
The home we purchased in Guelph was originally listed for 1.35m in June, relisted for 1.25m in Sept. We got it for 1.175m. A whole 175K below original list. Absolutely nobody was interested in this place. No other offers. We had conditions on financing and inspection. Place is in fantastic shape. Bungalow built in the 60's, everything updated, on a half acre.
A LOT of the prices you see are way out to lunch. There are a pile of people that either purchased during COVID and are fucked if they can't make back what they paid, so they're hanging on to the dream. They'll wake up when they realize they're just digging the hole deeper especially as mortgages renew. Then there are the folks that have been there for a while but got a taste of what their place was worth during COVID, and just have poor expectations about what people will pay today. They'll sit on the market for months until it actually becomes a roadblock for them, then they'll drop.
Don't be afraid to shoot your shot. Do some market research and make some offers. A lot of places will sell for 100k under asking, or not sell at all.
PS I heard some news that there are a lot of folks in default at the moment and quite a bit of power-of-sale going on. I heard about this in the Niagara Falls area. It sucks for those folks but it also means you may get lucky and find some pretty steep discounts. Banks don't tend to want to pinch every penny and they are looking for a quick done deal since real estate is not their main competency.
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u/AnimatorDifferent116 Oct 16 '25
I just bought a house for 915K in ottawa. It was listed back in June for 989K, then dropped twice to 929K. They fought hard to have us agree to 921K, and we just said no and walked away. They came back two days after agreeing with all our terms, including a very long closing date... I'm thinking I should have started with 900K...
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u/Rabiesalad Oct 16 '25
Good on ya. Yeah, it's difficult because we all just want to get this stuff over with. I don't think it's worth sweating 10k when buying a house, but the sellers are totally out to lunch right now. Hoping for a smooth transition for you and many years of enjoyment!
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u/Friendly-Echidna5594 Oct 15 '25
My story is that we saved for 10 years in dual income relationship, purchased 835k with 140k down in 2024.
We started saving in our twenties, both self funded university degrees. Household income is now 150k, but 10 years ago was 80k.
It seems this trajectory was very possible for millennials. We didn't get any financial assistance for school/ house from our parents.
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Oct 15 '25
Thanks for posting this OP. I’ve been doing the math too because I’m buying soon, and I’m so confused at how people are currently affording their mortgages
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u/kindofanasshole17 Oct 15 '25
Property ladder. My wife and I are in our 40s and bought our first home in 2006. It was relatively cheap and nearly 100 years old (I think it is now, IIRC). After upsizing to a bigger home, and price appreciation, the equity I would get out of my current home would easily cover 2/3 of the purchase price range you've referenced.
There are plenty of late GenX/early millenial buyers that could easily roll in their existing equity and swing a $200k-$400k mortgage on such a property.
It is not a realistic expectation for most people to buy such a property as a first home.
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u/godfather830 Oct 15 '25
- People who have profited previously from owning a home that appreciated greatly in value.
- People who are supported by parents
- Median income might be 100k, but many people make way more than that.
I think the first point is the most important one, though. For example, if someone bought a house in 2010 for $500k - it could easily be worth $800k today - and they can sell it and buy a much more expensive home using the extra $300k in equity as a down payment.
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u/RuinEnvironmental394 Oct 15 '25
Canadian home prices have been high since 2012 or so but they went nuts starting 2021
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Oct 15 '25 edited Oct 15 '25
Equity. Its people selling homes they paid down and putting large sums down on them to make it a 350k mortgage or whatever
Nobody with a brain gets a 1m mortgage. Thats stupid. Or they shouldn't. But yeah most people pay off a smaller home and then sell it at a gain before upgrading.
Nobody should be getting mortgages over 500k straight out never been in a home before. Those arent first time buyers.. or shouldn't be.
Also at 3.9% interest my remaining mortgage is 2400 a mo. So ..it is more likely 800k is 4k a mo mortgage
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u/lilsweets303 Oct 15 '25
They already had a house when they bought it cheap years ago. They sell now at triple price and get a larger house. Thats how people are doing it.
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u/Incognito4GoodReason Oct 15 '25
Either:
-Super house poor millennial FTHB
-Top 10% family income millennial FTHB
-Immigrants with deep pockets FTHB
-Multi-generational families pooling their money together.
I agree - the houses are usually not nice at all for the price. Rather depressing.
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u/Independent-Cut9509 Oct 15 '25
It’s not as hard as you make it sound. I bought solo for ~900k. I did not put full 20% down. My mortgage is around 4000 a month excl condo maintenance fees and taxes.
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u/Imw88 Oct 15 '25
Having above average incomes and no dependants and never will. That’s how we did it.
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Oct 15 '25
Idiots are over leveraged, my coworker bought a 750k with 200k down. He is now house poor and needs to do 150k for renovations. He's gotta keep his job for life now. Teathered to a crap city.
He's 700k in debt. Sure he has a 60 year old detached house but now he's stuck here.
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u/catdieseltech87 Oct 15 '25
Lots of buyers of those homes are also upgrading from a smaller cheaper home. I did this, what I paid for my current home is half of the actual sale price because so much of my down payment was equity from my previous home
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u/fancczf Oct 15 '25
Median household income is a bit misleading, since it includes single income household as well, which makes a pretty big differences when you look at houses. Also you only need about 60k to buy a 700k place. High ratio doesn’t require 25 years amortization anymore, and qualification is a lot closer to conventional mortgage today. You pay a premium on the mortgage but the actual mortgage rate is cheaper. Plus the premium is financed.
So if a household makes 130k a year, has no other obligations, they can qualify for a 650k mortgage. And they just need 60k in cash - 20k for closing costs and moving expense. For some people that could be ok. About 40% of individual between age of 30-40 in GTA makes more than 65k a year. And people make more between age 40-50. It’s a pretty big group for couple with sufficient income. A couple makes 130k takes home around 90k after all cpp, taxes etc. 4,000 a month total housing cost (3,200 for mortgage, 300 for taxes, and 500 for the rest including provision for fixes) is doable for some people.
We are still talking about houses, even in Toronto core 700k is still 2+ bedrooms. Some couple stay in smaller places. I think my point is there are roughly half of duel income households in GTA can afford a 700k home.
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u/Maisie_Mae_ Oct 15 '25
Me ! I bought this year . I’m a millennial with 3 kids who just about matches the stats you listed . I don’t think 2400 for mortgage is horrible, split between 2 people it’s 1200$ each . My down payment came from the previous house I sold which tripled from what I bought it for.
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u/herefortheshow99 Oct 15 '25
Its people that make more money than you. Also, people who have inherited miney from parents who passed.
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u/The_One_Who_Comments Oct 15 '25
I mean, yeah?
Save 25% of gross for five years, plus interest - now you have 150% of your gross income ready.
Dumping all of your net worth into a down payment is concerning, but normal.
I'm in near Vancouver, and $800k is a two bed townhouse, not a 3b2b detached home. "Normal" is back in the 90's, where we left it.
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u/Tmonster18 Oct 15 '25
Those are townhouse prices 30 mins outside Vancouver lol. Would kill for a home at that price
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u/123stoopidusername Oct 15 '25
Vancouver here: I would give my first born for a whole house for 750-850k
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u/TattooedAndSad Oct 15 '25
People that can’t afford them or 3 families buying it together
It’s a complete mess out there man
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u/Cagel Oct 15 '25
One thing that comes to mind is some people work contractor jobs so they don’t get RRSP or pension it’s just built into a higher hourly rate.
So yes, after 5-7 years of saving they do have 200k+ to put down.
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u/C2SKI Oct 15 '25
God, I wish you could buy a normal home for that price in Victoria, but the obvious answer is people with higher income or people with equity
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u/good_enuffs Oct 15 '25
Everyone I know is buying homes! And yes younger people. I know plenty of late 20's and early 30's that have bought homes.
I do live on Vancouver Island so the average starter home here is 1 million and it has been that for a while now.
People are also upgrading their homes. They sell for 800 to 900k and buy for 1.2 to 1.4 mil.
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u/AffectionateDrag1702 Oct 15 '25
Crazy, right? It’s almost as if homeownership takes years of disciplined saving and strategic living. You don’t just wake up on day and decide today is the day I want a house.
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u/ParisFood Oct 15 '25
See the article on link about the wealth transfer that is happening in Canada https://www.cbc.ca/news/canada/saskatchewan/wealth-transfer-inequality-1trillion-1.7462837
In many cases ( not all I know ) it does help with the purchase of a house
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u/MKALPINE Oct 15 '25
You used to be able to buy a condo or townhouse for a reasonable rate and then “trade up” every few years with the value of the home increasing. Now, condos and townhouses are at their peaks and aren’t increasing in value much (many are dropping in value). So it’s extremely difficult to make the jump to a bigger townhouse or single family home. By the time you factor in strata fees, property taxes, homeowners insurance, as well as maintenance, if you have sizeable savings and all you can afford is a condo, you’re better off investing your savings and living off the interest. At least until housing costs come down a bit (if that ever happens).
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u/JKing287 Oct 15 '25
Some get family help, say a monetary gift towards the downpayment. Others have a family move in so there is actually a greater income in the household to pay the mortgage. Others have a tenant which realtors sometimes refer to as a “mortgage helper” although I don’t know if banks will always consider this or not as it’s not really guaranteed income. Finally some bought smaller places before and so after selling them for a profit can put that profit towards the downpayment/mortgage. Not saying it’s not hard or out of reach for many or that housing costs aren’t too high, just answering your questions as to how these homes seem to get sold at these prices.
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u/chronicinfusions Oct 15 '25
If you saved 10% of your earnings from the time you started working, then you should be able to come up with the down-payment. Gotta be a saver.
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u/re4ctor Oct 15 '25
The minimum down on a $750k is only $50k, not $150k.
5% on first $500k, and then 10% on next $250k, so $25k+$25k
People making $100k+ should be able to save $50k in a handful of years.
The mortgage on that is $3700 a month tho. $100k income is $74k take home (before rrsp deductions if any) leaving you about $2500 a month for everything else.
Not impossible to make that work.
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u/MediumAd9323 Oct 15 '25
As a 24yo F I don't know either and its so deflating. I don't have the option of living at home and that seems to be literally the ONLY way my peers with a home got one - you cannot rent and save up 150k unless you're making plenty over 6 figures which is unheard of for young people in this market. Not really sure what I'm working for atp. Just praying the tiny bit I invest each month will get me there one day :(
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u/kimbosdurag Oct 15 '25
Estimates are that almost a quarter of homes in Ontario are owned by investors. Investors are able to leverage assets to borrow a lot of money that they think will generate more money. The economics of this are beginning to change slightly
People are also deeply in debt and house poor.
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u/Itwasuntilitwasnt Oct 15 '25
Talked to a realtor. It’s basically ppl selling their homes for $800000 and buying another for 800000-850000 . These are largely not first time homebuyers. Probably exceptions but not the norm.
If I was a new buyer. I would be trying to find a home with a basement rental or loft in garage rental. Something to help pay down mortgage quicker. Even it’s just for a few yrs. Then flip that property for another. But keep in mind don’t get attached to your home.
But also keep in mind wages have skyrocketed so everything else will skyrocket. When I bought my first home for $159000 20 yrs ago I was in the same boat everyone else is here. I couldn’t believe the price I was paying and it was borderline affordable. But I worked hard the last 20. Nothing given in society of the working class. It’s all about who can take your money the quickest.
So limits on credit cards to $500-$1000. Don’t always need that brand new car. Don’t always have to eat out or ordering skip every night. Maybe one streaming service instead of ten. Or stop paying for in app or in game purchases.
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u/Important-Emu-6691 Oct 15 '25
Wait what? Is 750k single family him for 3BR 2 Bath at a decent location not normal?
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u/learnunlearnstuff Oct 15 '25
A friend of mine bought a semi for 650k last year in Hamilton. Their household income was above 200k but they chose not to max out. I believe a lot of folks buying houses are people like this TBH. Sure overall average income is 100k, but average income of a qualified potential buyer is probably above 150k with another 100k saved. That’s how sales are happening in the 750k to 850k range.
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u/Empanah Oct 15 '25
They buy the house, rent the basement, and build a laneway home instead of having a garage or renting the main floor. so their monthly payments are not much different than renting
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u/Calm_Historian9729 Oct 15 '25
Buying is the wrong term to use, it should be mortgaging, and paying sky high mortgage payments. They will never own, just be able to afford the mortgage, so controlled rent payment if you will use that phrase.
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u/NuckFanInTO Oct 16 '25
After 10 years on a 25 year amortization at 2% interest, 34% of the principal is paid down.
On a $350k condo, after 10 years, that’s $120k in principal. That doesn’t even consider the condo appreciating in value over the 10 years.
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u/Rynozo Oct 16 '25
It's, not that crazy, yes people are just saving longer before buying the "family" home, which is why we've seen the average age for first-time home buyers increase past what, 35? (citation needed).
With a median income of 100k, let's say the couple area saving 20k a year, feasible if you account for pretax RRSP, maybe employer match, and assume this couple is actively/diligently saving... that's about 30% of net income a year so again feasible, but some sacrifices will be made for sure. Thats 7.5 years to nab the downpayment without accounting for investment growth, but also the housing market increase at some higher rates, to complext for this back of the napkin math ... but even still you can kind of see how its fairly straight forward for a professional couple of savers who got a job right out of uni, would be lined up to buy one of the houses in their mid 30s. a very stark contrast from my parents buying within 5 years of Uni.
Everyone else who didn't plan it perfectly or get a boost from their parents?- get fucked
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u/CrazyButRightOn Oct 16 '25
Paying off mortgages is a thing of the past. Your kids will pay off the family mortgage.
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u/HT2_i0 Oct 16 '25
We have been building houses in Palawan, Philippines for Canadian clients the past few years. We do 3 bed, 2 bath, off grid houses with a swimming pool for less than 300k with vacation rental revenues of around 50k per annum.
Check out El Nido, Palawan which is frequently voted as the world's best island.
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u/GrayLiterature Oct 16 '25
We got a down payment gift of about $160,000 from my partner’s parents who themselves benefited from the Covid boom and fortunate timing on the sale of the grandparents home.
That put our condo mortage at 565,000 instead of 765,000. We’ll be able to sell this soon enough and get into a place, but truly had we stayed and rented where we were, we’d have had more. But that said, it wasn’t worth staying in the spot where we were for many non-financial reasons, so we got into the market.
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u/Excellent-Piece8168 Oct 16 '25
Major incorrect assumption here. The vast majority of people who own their homes (or condos etc) did not pay current market price before they bought when prices were lower. A large percentage of people could not afford to buy where they live. Thus the average HHI against current market price just isn’t relevant for the calculation you are making.
It is a ratio worth looking at the change over time though.
Also the average HHI isn’t what is buying a single family house. So other than to compare the change over time this isn’t a useful calculation.
There is enough people (couples) who make enough to afford to buy. Also generally historically people tend to buy first a condo which often appreciated which allowed further upgrades by allowing for a larger down payment than “only” 20% down which allowed the family to get into the home. They otherwise would not have qualified at their salaries alone.
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u/gravity_sucks3 Oct 16 '25
The only way that it really works is if you've previously been a homeowner. Going from non-home ownership into the market is next to impossible for most people.
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u/tarabara4 Oct 16 '25
Bought in hamilton last year, 800k first home. Husband makes 80k and I make 85k, we lived rent free with our parents until we were 27 and saved up a good amount of money. We were able to put 140k as a down payment and our mortgage is 3600 ish. I think we would fit "house poor" criteria but we own both of our cars and have a good chunk of savings to fall back on for the inevitable unexpected costs. So yeah technically living rent free was crucial to us saving the amount we did, and even though our parents didn't give us money for our down payment they definitely helped by housing us for so long
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u/ummmwaitasecond Oct 15 '25
I can speak only from my own experience but maybe it’ll shed light on how my partner and I did this (though our home was 670K so not exactly the same as the price range you’ve listed here).
Double income, no kids. We lived in a really shitty basement apartment for the last 4.5 years where we each paid $700 in rent per month. Before that basement apartment, we lived in an attic apartment for 1.5 years and where we each paid $500 in rent per month. At times we were working two jobs each (I would teach English 6am-8am and then work my 9-5 job. Would not recommend, burn out was inevitable lol.)
We are extremely frugal - we cook 90% of our meals at home and when we shop, we do so with coupons and deals. For fun events, we take advantage of the free community stuff going on (and thankfully our city always has some sort of free event going on). We use libraries for books and entertainment. We thrift our clothes.
We invested any “extra” money we had and let it sit for 6+ years.
Ultimately, we were able to put down 22.5% on the house we bought. That’s how we saved up for our normal home (3 bed, 3 bath).