Buying a home in Toronto might be a thing of the past for my generation. This is all due to something called the Toronto housing gap. Although not new, this gap might as well be called the great division as it begins to separate us into two groups: homeowners and renters. And even then, millennials may choose to live with their parents longer to avoid the burden of such a high cost of living.
As a part-time employee in a midtown Toronto realtor’s office, I see the challenge up close. The average price of a single-family home in Toronto has officially surpassed $1 million. According to the Toronto Real Estate Board, in 1990 the average price of a home in Toronto was about $255,000, which means we will be paying several times more than our parents did. An analysis made on April 18, by The Economist magazine showed that the Canada’s housing prices are being overvalued by 35 per cent.
In some cases, the generation before us was less educated, but they had more options and careers to choose from. Along with our higher education comes the excruciatingly high student debt and we are left to spend years scraping our non-existent pennies together to save up for that first initial down payment.
But what is more frightening than our inability to purchase a home is that the working class is slowly vanishing, leaving us with an even greater divide: the rich and the poor.
Even though condominiums are cheaper and possibly our most viable option, they’re not any better than a home purchase. According to CBC News, RealNet figures show there is a price difference of more than $290,000 between detached homes and condos. But even with significant savings in purchase costs, a condo carries significant other expenses. Monthly condo fees can range up to the thousands and getting a mortgage on a condo can be more challenging than applying for one on a home.
Additionally, some condos have a parking fee that can cost $25,000 per year for one spot. If you want to rent out one of their storage lockers you can add another $3,500 on top of that. And it’s likely that you’ll need to. Condos in the 416 are also a lot smaller, comparative of a shoebox, with a price tag as unreasonable as their size. The Globe and Mail reported that, “the average unit size of newly built condos has fallen from 925 sq. ft. a decade ago to 801 sq. ft. today.” These large skyscrapers that are filling our downtown core are only costing less due to the large number of unoccupied spaces, and that cost difference is very modest.
We could live on the edges if we feel so inclined by venturing out of the city and into the suburbs. However, you will have to endure hours-long commutes into and out of the city. Either way there is going to be a large majority of our generation that remains in debt, and even more so if we manage to own a home.
Whether divided as a renter or homeowner we will all be in a group owing a debt. It is all a matter of how much or how little debt one wishes to accumulate.
With school debts, and the minimum wage at a mere $11.25 per hour, the possibility of a mortgage is slim.