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rob carrick

It's time to be honest with millennials about their chances of owning a house in their city of choice.

You may be shut out of the market, even if you're hard-working and fortunate enough to have help from your parents. It's happening to Jessica Kushner, a 27-year-old who works as a subway train operator for the Toronto Transit Commission and lives at home. She wants to buy a house in the city with her fiancé, but hasn't been able to keep up with rising prices: After bidding on two houses and twice losing out to much higher offers, she's feeling stressed out and psyched out.

"I feel like every day I'm not looking at houses, I'm literally missing out because they are going up in price so fast," she said in an interview. "I can't even keep up now. I'm in over my head."

Buying a house today in cities with hot housing is way too big of a deal. It's like running a marathon, or mixed martial arts. It's not normal, but people play along because home ownership is a Canadian obsession. Ms. Kushner is a true believer, but can't get in the door and is getting increasingly frustrated about it.

She got our attention by offering to be part of an online Paycheque Profile, a feature we're running on how young adults are managing their finances (check out our Gen Y Money page). Here's a sentiment in her e-mail that demands attention: "I grew up in this city and I work in this city. It seems only fair that I should be able to afford a house here."

Young adults have heard endlessly about the joys of home ownership and many naturally want to buy themselves. But day by day and bidding war by bidding war, they're being priced out of the market unless their parents have unlimited resources or they work in six-figure professions.

Ms. Kushner is new in her job and on a track that will see her earnings rise steadily over the next two years or so. She estimates she'll be earning at an annual rate of $60,000 to $70,000 by the end of this year (her fiancé earns a similar amount), with the variation accounted for by the number of hours she works. There's also help from her parents, which isn't unusual in the Toronto market these days.

And yet, the market doesn't seem to have room for her. "It's depressing," she says. "I'm working with this idea in my head that you work hard, pay your taxes and you get to live here [in Toronto]."

The two houses she and her fiancé tried for are in a midtown neighbourhood on the west side of the city. The first one was listed at $589,000 and sold for $730,000, while the second was listed at $749,000 and sold for $840,000. "By no means are these the houses I dreamed of living in," she said. "They're small, they need work, they have tiny lots. Only a few years ago, they were selling for less than half-a-million dollars."

This is what you get when a city's real estate market is on the boil – people fighting to get into homes they might well outgrow in a matter of years, if not months. One of the houses Ms. Kushner bid on was roughly 1,000 square feet in size and had only two bedrooms. The squeeze would have been tighter if she followed up on her intention to rent out a basement apartment.

We want young people to have the chance to own their own home, but we also want them to be realistic about where they'll live and not feel otherwise entitled. Ms. Kushner's living at home and says she saves almost all her paycheques after the cost of running her car. "I don't pay rent and I barely have time to spend money. I work almost 60 hours a week."

That's part of the reason she's not keen on renting – she feels she has sacrificed for a house and is ready to get on with the next phase of her life. She's also not big on condos, but is starting to think about them. Her flexibility ends at long commutes from way outside the city, as some of her colleagues at work do. "If I have to live at home forever, so be it," she said.

Ms. Kushner wants governments to do something about unaffordable housing for young people like her, possibly by putting restrictions on purchases by foreign buyers. But she also recognizes that the market may be moving out of reach. She recalls her sister buying a house two years ago and having her mom encourage her to do likewise despite a cost that even then seemed high.

She told her mom she'd wait. "I remember thinking, there's going to be a bubble anyways, I'm not desperate. Stupid me."

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Jessica Kushner, 27, talks about trying to buy a first house in the city:

  • On trying to save while prices soar: “The more you save, the further behind you’re getting.”
  • On bidding $630,000 for a house listed at $589,000: “Here I am thinking, I’m giving above asking and that should be good enough. But then it goes for $730,000, and I’m having a heart attack now. I’m like, are you kidding me?”
  • On bidding $790,000 for a house listed at $749,000 and sold ultimately for $840,000: “That was really disappointing because I’ve looked at a few more houses since and they are priced way above what I think they’re worth – at or close to $1-million. It’s crazy to think, but I might very well have to buy a $1-million house. That’s wild.”
  • On the pressure to make quick decisions: “Literally, I walked through [one particular house] once and had to decide whether I wanted to buy it. You spend less time looking at a house than you do buying a car.”
  • On her parents’ help in buying: “Otherwise, I would have no chance.”

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