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Houses out of reach for first time buyers in Toronto

Houses out of reach for first time buyers in Toronto

The average price for a single-family home in Toronto hit $606,000 last month.

That’s according to a new system for tracking home and condo sales launched last week by the Canadian Real Estate Association (CREA).

It’s not a misprint. The cost of a Toronto house is up by approximately 50% since 2005.

But, fear not! According to CREA, the astronomical cost to be a homeowner in the 416 is actually still affordable to the average Torontonian.

Breathe, Rachel. Just breathe.

Then go look for these mythical average Torontonians and learn their secrets. Perhaps also borrow some money. Hey, we can afford it!

In all seriousness, if it’s true the “average” Torontonian doesn’t gulp when dropping well over half-a-million on a regular old house, then we have truly pushed the middle class out and the city is becoming the exclusive playground of another demographic all together.

Unless you already have a foothold in the downtown market, how on earth is the average Torontonian going to come up with a 20% down payment for a $606,000 house?

Is it any wonder so many people, especially young, first-time buyers, turn to the condo market?

While they’re still fortunate to be able to afford to buy a home at all, the idea of owning a house in the city — or the Holy Grail of Toronto real estate, a detached house — is a dream. A sweet, sweet dream: I’m picturing a front lawn and a backyard. Sigh.

It’s not the cost of city real estate per se that has me steamed, although the thought of how to buy a house that isn’t ready to collapse into a heap of lead pipes and drywall has kept me up at night recently.

It’s that real estate organizations like CREA are still trying to sell our uber-expensive housing as affordable. That is irresponsible in my view and, to many, insulting.

The other line that supposedly makes Toronto housing affordable is that, compared to other big cities, our real estate is a steal.

That may be true, but I don’t really care how much cheaper Toronto is compared to London or New York.

We’re Torontonians. We don’t live in London or New York.

And, in Toronto, $606,000 is still a whack load of cash in a city that can’t even get its act together to provide adequate transit.

I’m not anti-home-ownership; the opposite, actually. I own a condo (well, the mortgage company and I share it at this point) and I hope to buy a house in the city with the fiancé after our wedding.

This, of course, will take our combined incomes and a heck of a lot of scrimping and saving. And there’s nothing wrong with that.

What I’m against is irresponsible home ownership.

That is, if you’re barely scraping by to make your monthly payments now and an (inevitable) uptick in interest rates results in a personal financial crisis of cataclysmic proportions, well then, guess what? That’s not sustainable, and it’s certainly not affordable.

In a lagging economy, at a time when we are bombarded with messages of austerity, reminded over and over that the average Canadian carries too much debt and that we must start to live within our means, the fact we’re being told expensive real estate is affordable, thanks to low interest rates, is a recipe for disaster.

But then, we can’t expect the CREA, or any other organization with a vested interest in keeping Toronto’s real estate market red hot, to hold our hands.

People have to be their own watch dogs.

And we need to have informed, realistic expectations about what we can and cannot afford.

SOURCE:By ,Toronto Sun