How can anyone afford a home in Canada right now, viral Reddit post asks

A Reddit post on the Ontario subreddit has garnered hundreds of comments for asking the all-too-common question at the top of Canadians' minds: How can anyone afford a home right now?

The original poster, @tumbleweed1212, shared this quandary: If they want to live within an hour of their workplace, the lowest-priced house available is around $500,000. After using a mortgage calculator, they figured monthly payments would range from $3,200 to $3,600.

“That is my entire salary. All of it,” they wrote. “I wouldn't be able to pay for food, let alone my car or insurance or [anything else.]"

“How is anyone besides a realtor, lawyer [or] doctor able to buy a house?” they asked.

The user tumbleweed1212 did not specify the city they lived in, but the post was published on the Ontario subreddit. They said they felt "failed" by their government and representatives and added that they'll have to make peace with being a renter forever.

But renting is increasingly out of reach for many Canadians too.

Average rent in Canada hits new high — again

A rental price report published in November found that the average asking price for a rental unit in Canada in October was $2,178 last month. That’s a 9.9 per cent increase from just one year prior, and a new high for the sixth consecutive month.

A 2022 report by Canadian Centre for Policy Alternatives looked at the cost of rent in cities compared to the hourly rate needed to afford it. It found that the rental wage is significantly higher than minimum wage in all of the provinces.

“Even in the three provinces with the highest minimum wage in Canada — B.C., Ontario, and Alberta —there’s a shortfall in what minimum-wage workers earn and the rent they have to pay, on average,” the report reads.

In Toronto, for example, the research found you'd need to make $33.62 an hour to afford the average 1-bedroom unit, or $40.03 an hour for a two-bedroom. The minimum wage in Ontario at the time of the report was $15.50, though it is currently $16.55.

Fewer Canadians own the homes they live in

The original Redditor who lamented the apparent end of their dream of homeownership appears to be in the same boat as many Canadians.

A StatsCanada report published in 2022 found Canada’s homeownership rate has declined to 66.5 per cent in 2021, after peaking in 2011 at 69 per cent.

Young Canadians in particular saw homeownership numbers dip. In 2011, 44.1 per cent of homeowners were between 25-29 years old. By 2021, only 36.5 per cent of that cohort owned a home.

Expert says affordable options exist — outside city centres

Frank Clayton is a senior research fellow at the Centre for Urban Research and Land Development with Toronto Metropolitan University. He says there are a few options for those looking to buy property, although they might not be ideal for everyone.

For those wishing to stay in a city like Toronto, the key is to buy small.

“Instead of buying the average-sized house, you buy something less than the average-sized house,” he says. “You buy a condominium.”

Another option, if possible, is moving somewhere more affordable, he suggests. He notes that the cost of housing isn’t out of reach across the entire country, and that places like Edmonton and Ottawa, which have more designated land to build housing on, have more affordable options for home buyers.

“Ottawa planned for housing in a big way and they expanded the land supply…and gradually housing will get more affordable,” he says.

Canada reacts: You can't do it alone

The post appears to have hit a nerve, garnering over 900 comments in under a day.

Many said affording to own your home in Canada right now likely can’t be done alone.

“You have a partner. That's step [one],” amontpetit wrote.

“On your own, it's virtually impossible,” FortressMaximus1973 wrote. “You need help from a partner, or from your parents or other family. Or you need to make an insane amount of money.”

Other commenters mentioned they were only able to afford a home by being a DINK — dual income, no kids — as user AdmirableBoat7273 put it. Or with help from family members.

Generational property ownership appears to have a significant impact on who can afford to buy property. According to a November 2023 Statistics Canada report, if your parents were homeowners, that meant you were twice as likely to own a home too, compared to those whose family weren't homeowners.

It found that adult children of those who didn't own a home had a home ownership rate of 8.1 per cent in 2021, compared to 17.4 percent whose parents did own a home.

"Gifts" from the "Bank of Mom and Dad" — money given to their children to buy a house — averaged $82,000 for first-time buyers in 2021, according to research from CIBC.

“Wife and I bought a 120-year-old house that needs a lot of work, for [$565,000],” Reddit user AndyB1976 wrote. “We had the help of her mother for [the] down payment ... and we rent a room to my youngest kid. It's taken three generations of family to make it work and we all live here together.”

“Our mortgage with property taxes is 3,900 a month,” SicJake wrote. “Pretty much my whole [paycheque]. It only works because my wife also has a decent job and [my] mother in law lives with us and helps with child care.