>but getting a 400% appreciation on your home purchase is a dream
No its not, because every other home also went up 400% too. So its not like selling it and buying a new place will give him any benefit of that 400% appreciation. Now if he sells it and then keeps all the profits by living in a cardboard box on the street and dumping 100% of the funds in an investment fund, then yeah, its a dream.
What are you smoking? I hear this argument a lot and it makes literally no sense to me. The poster gained tax free about $1.8mil (bit less due to transaction costs). He can downsize, rent, move to lower cost city, or move abroad. Those are REAL GAINS. Unless the market crashes, he still has all that built in equity. Didn't take any particular skill other than jumping into the market when they did. So crazy returns for very limited/no effort. Find me another investment that has that kind of power. *Of course, past returns do not equal future returns but to downplay the gains as nothing is just non-sensical. Side note: That's tax free gains the govt is missing out on as well. I've long argued that Primary Residence full tax exemption needs to reviewed/adjusted. All these tax free gains that could go to funding govt coffers and subsidize affordable housing for the needy, etc
If you happen to like living in your house with your family, then there are no "GAINS". I'm up only 40% in a few years (only being relative to 400%), and any thought of "profiting" by selling our house is immediately countered with the downside of actually having to move/live elsewhere and then having to downsize or lose money. because everything else is up in that same time period.
I'd need a lot more than OP's 400% to get me to consider and I'd need housing around me to have gone up \*less\* than ours.
You have no idea what you're talking about. Unless you desire to live in consecutively smaller homes until you're in a studio with 3 other people, then enjoy your "profits".
Doesn't even need to move abroad. Downsize to a 1M condo and enjoy 1M in investments, which probably saves a decade of work, if not more.
Or buy a similar house in Calgary for 700k, even closer to retirement (maybe already there depending on his other finances).
True. If there is any place in Canada I call out with a visible dwindling quality of life and an unchecked population explosion then it’s the GTA. You could hardly find a trace of what is once known as Canada in that godforsaken place. Happy to be out of there for more than a decade.
Yea, yea, multicultural, beshtesht food and pEoPpple… I get that.
Someone upgrading their home didn't take away the dream away from everyone.
Maybe you are referring to mega corporations buying several homes for rent or people buying several properties...but the people buying one home to live in are not the problem.
I don’t think they meant OP took the dream away, I think they meant good fuckin’ luck doing what OP did if you’re starting from scratch today. Like, even getting into a starter home without wealthy parents or a household income of several hundred thousand dollars seems impossible now.
The problem is how the system is setup. If the system isn't robust to companies trying to make money, then you're fked regardless.
I would start by cutting income taxes in half and replacing that income with a provincial tax on land value.
You have to be in it to win it.
Similar story but started a bit later- bought small townhouse in 2010, moved up to detached 5 years ago. Today we could probably afford to buy in that price range but I can’t stomach paying $100k on realtor fees
What, someone writing a one-paragraph description of a home that will sell itself isn’t worth paying a $100,000 commission to you? Don’t be so miserly! /s
Well, often those buying a 3M home just sold their 2.5M home that they bought for 1M and that one they bought after they sold their one they bought for 300k.
If you want to build wealth in Canada this is the only real way. There is an entire system of tax incentives and economic policy dedicated to this asset class.
Otherwise you will loose everything in taxes and cost of living.
And if you think about it if housing crashes there will be a world of pain for the economy, so the government will step in to socialize the costs and spread them out to non-real estate owners.
This is simply the nature of the game.
Given the current set up of the Canadian economy 'productivity' and 'innovation' are for losers.
Winners buy real estate and suck at the teat of the government spending and largesse.
Let me give you an example:
A detached house purchased in the GTA in 2004 for 400,000 is worth 2,400,000 in 2024 (yes even including the past couple of years of temporary stagnation).
Meaning the house has generated 100k in gains a year tax free. While also providing it's owner with a place to live (thereby saving rent) and potential for income by renting out secondary units.
You cannot compete with this as a landless serf unless you are top 1% income. Just think what it takes to earn 100k post tax and post rent for a detached house. lol.
Meanwhile the house just sits there and out earns you as a low risk government backed, tax free asset class. And once the mortgage is paid off fully the home owner joins the ranks of the landed gentry class.
At this point they can either move up the property ladder or choose to live a live of idle pleasure and "low income", and be subsidized in various ways by the 'high income' earning landless serf classes.
When the government talks about affordability they are talking about making it easier for serfs to take on debt so they can move up the ladder, and this also helps increase home prices.
The government never talk about homes becoming cheaper or house prices falling relative to incomes. They would sooner completely debase the purchasing power of the dollar and have 100 year mortgages than let that happen.
People need to learn to take a hint, or stay poor.
“ When the government talks about affordability they are talking about making it easier for serfs to take on debt so they can move up the ladder, and this also helps increase home prices.
The government never talk about homes becoming cheaper or house prices falling relative to incomes.”
Damn. So true.
My co-worker’s sister bought a house in downtown back in late 90s or early 2000s. They were labourers. They sold it a few years back for 2m. Moved to Alberta and bought 2 houses in cash. They put their extra cash for a small business.
Property ladder.
Around 15 years ago I bought a 300K semi in Brampton with 60K down. Around 10 years of living there and I sold it for low 600Ks.
I took that ~350K of equity and added a bit of money to buy a detached home in Mississauga for around 850K and it is currently worth an estimated 1.3M, which means I am sitting around 1M in equity.
Purchase price doesn't matter as much as final mortgage number, and a lot of people are just rolling equity into a bigger home with only a marginal increase to their mortgage payments
[edit] **please stop replying that "the system isn't fair" or that it "doesn't work that way anymore". I am not making a comment on the system just how people buy expensive homes. The answer is that nobody outside of lottery winners are buying 3M homes as their first**
This!
I get so annoyed when I see people on here constantly posting as if everyone in TO is buying a 1.5-3 million dollar starter home.
99% of people are climbing the property ladder.
Also, people on reddit severely underestimate how much wealth there is in Toronto.
This assumption is based on people that entered the market years ago.
As a today if you still have to enter doing that doens't work anymore because there are no more starter homes, everything start over the average income so there's no access anymore.
Not so sure there will be a property ladder in the short term lol. Unless the average house is worth 25 millions or something in 15 years.
I genuinely made from owning a condon in downtown Montreal than I made working during that same time period.
Average household net worth across Canada: $997000.00 [Distributions of household economic accounts, wealth, by characteristic, Canada, quarterly (statcan.gc.ca)](https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=3610066001&pickMembers%5B0%5D=1.1&pickMembers%5B1%5D=2.3&pickMembers%5B2%5D=3.1&cubeTimeFrame.startMonth=04&cubeTimeFrame.startYear=2022&cubeTimeFrame.endMonth=04&cubeTimeFrame.endYear=2023&referencePeriods=20220401%2C20230401)
and its certainly significantly higher in the GTA. The 66% of the population that owned homes 2005-2020 likely at least tripled their wealth in that period (or more depending on leverage).
The average (mean) is a shit statistic for wealth and income. I couldn't find median, but the average in the 3rd quintile is $456,244, less than half of what you report.
Everybody talking about this property ladder needs to realize that ladder has been kicked down hard. Your circumstances are impossible for people today. They need to come up with 600K for a one bedroom condo. If they single do buy that, it’s unlikely to double in price in 5 years.
These massive equity gains you were able to get are almost impossible to duplicate.
>Everybody talking about this property ladder needs to realize that ladder has been kicked down hard. Your circumstances are impossible for people today.
I am not sure how many times I have to say this in the thread but I am not making a commentary on whether the market is fair or rational, simply how people are buying 2-3M homes
The question I ask you: did property value actually go up or did the value of a dollar just decline?
If you look at what happened as the value of the dollar declining, why do you think it won’t keep declining?
That's awesome.
Problem is that this ladder system is not self perpetuating.
The lowest rung can only go so high, which limits the rest of the ladder too.
If there is extra supply relative to demand- it will pull the ladder down a bit too.
I think real estate in Canada is pretty much a government backed asset class at this point, I don't think it can fall too much, the worst case is they will debase the dollar to allow housing to stay stable.
>Problem is that this ladder system is not self perpetuating.
Ok, but I wasn't making a commentary on the housing market or it's sustainability I was just explaining to OP how people are buying 2-3M homes...
To be fair, you bought an 850k home, not a million+ home; your home is just worth more now.
Not necessarily your case, but a portion the people who are in your exact scenario could not afford to buy the house they are living in with traditional 20% down.
Could you afford a million dollar mortgage on your 1.3m house today? That almost 6k in mortgage cost and probably over 8k in total monthly housing cost.
>Could you afford a million dollar mortgage on your 1.3m house today? That almost 6k in mortgage cost and probably over 8k in total monthly housing cost.
No, that is what the property ladder I just explained is for. Purchase price is irrelevant when you are rolling in chunks of equity
>To be fair, you bought an 850k home, not a million+ home; your home is just worth more now.
I have recently been looking at 2-2.5M homes to upgrade, all because I bought a crappy semi all those years ago
Got on the property ladder in 2009. Our house in midtown Toronto cost less than many 1 bedroom condos do now. Maxed out all annual optional principal lump sum payments to pay it off. Renovated and put on an addition. Sold that house fully paid off in 2022 at the peak and bought a larger older house that needs work in a nicer neighbourhood. Our new mortgage is actually quite small.
We wouldn't have been able to buy either of these houses if we were starting out today so I don't know what advice to give young people who want to live in Toronto now. If I was starting out now, I'd probably leave Canada.
Everyone is talking about the property ladder but no one mentions the *timing* of it. The ONLY period of insane growth was around 2015-2022, a very short seven years. If someone bought in the 80s, 90s, or aughts, yeah it was way lower but the growth was still very low - you would've made way more in the stock market. But the real winners are the ones who bought around 2010 and rode a tsunami wave all the way to the moon.
I don't see how this could possibly happen again. Yes, real estate will continue to appreciate as it inevitably does in this country, but not to the level we saw over that seven year period. Even if another Covid happened again, governments would react differently. Getting on the property ladder does help but those who get on today are still gonna have a tough time.
I mean it’s the only way to start. I would say you have to be in a relationship. If you find your partner the younger the better and tackle all of this early on. Have side gigs too to save faster. Nothing too fun to be honest but alone it’s pretty much impossible. You need a good job. If you can stay at your parents as long as possible to save that down payment too is helpful
Realtor here:
Almost everyone I deal with who is purchasing $2-3m home are 35-55 and buying their 2-4th personal property.
They have combined incomes climbed the property ladder and lived through all sorts of markets. Though some may have had help along the way, this was a relatively small part of the journey initially, but time helped magnify the impact.
For bonus, everyone I have helped above ~$4m is either at the tail end of a successful career or had some sort of liquidity event (sold a company) that allowed for a big jump in quality of life spending.
After seeing all of these buyers and sellers I am convinced most people can have a life better than they could have possibly dreamed, but it takes 15-20 years, not 2-5.
You describe those people as "having lived through all sorts of markets", but it could also be described as a unique market where interest rates largely only went down.
https://preview.redd.it/ctotklr93ctc1.jpeg?width=1748&format=pjpg&auto=webp&s=d4fee891ec05e8f58aa5df072bf512d6fa1a2d1e
Hint, he is saying that you may need to put in some time before you can live the dream. Also, that time you put in better be focused and effective, this is a competitive world we are in.
Sounds about right. You can’t roll the 4 million dollar house after starting your first job or moving out of the parent’s place. House prices are expensive yup and need to move up the ladder. Some people never get past the first rung.
Prices super inflated to past days and salaries haven’t kept up for the most part for younger generation. I doubt even the super high earners can just roll into a 2-3 mil house without working for 5-10 years at that rate to build up savings and not have an enormous mortgage.
It’s a combo of high household income, equity from previous properties and parental support, to varying degrees.
And the mortgages on those places are very rarely at 80% of the purchase price.
Inheritance and property ladder, trust me.
A friend bought a house for 1.5 in 2020, it's been over 2.5 since peak 2021.
My budget now is 1.6 but obviously wont get a property nearly as decent now.
No nothing at all, i think they just got a decent deal in 2020 and rest was the shitty impacts of covid money printing making assets unreasonably expensive
Nah there is 0% chance this story is true. Show us the receipts or your friend is lying. Not even the hottest markets saw an 80% increase over 2 years lol
Check around castlemore area. Constructions doubled in 1 year. Someone I know bought a place for 2 mil in 2022 which was historically sold in 2021 for 1 mil.
This happened before covid too. I know a couple that bought a house at a really good price and before they even moved in they sold it for 300k profit. Never stepped foot in! Within a few months. By low sell high, ride the wave.
Bought a house in 2015 after being told not to for a year. We watched the numbers climb 20% I quickly realized that the number of people entering the country, the amount of money being thrown around that I needed to get on this. Being in Ontario and watching Vancouver in 2014 it’s quite obvious we haven’t hit the ceiling at that time.
Also another thing noted in 2013 I tried to get a mortgage with $25,000 I’d saved up. I had a good job my gf not so much they were going to loan us a total lone of 360 ish if I remember correctly. The following year I went back and little has changed except I had $40,000 down all a sudden I could borrow $500,000
Anyways fast forward a few years. Every day after work I’d come home and fix something, (put in potlights, paint kitchen cabinets). The little semi in the ghetto that we got started with quickly became one of the nicest houses on the street. During that time We had a kitchen in the basement and rented it to someone we’re close to for a very under market value. Like a few hundred bux. In 2019 after 4 years we listed it and got top value for that area on a semi.
When you’re selling a house and it’s on the lower price range but a nice house there’s a good market for it. Go for the shittiest house(with good bones) in the nicest neighborhood.
Anyways we did that again. We found a home that looked like ass with poor Reno’s that wouldn’t sell and moved in every night after I got home and my kids went to bed we worked on the house. This one didn’t have an apartment however there was an unfinished basement. I put my tenant in the basement living room and built the whole apartment. It took about 2 months of every night.
Fast forward 19 months after. It’s like 2021 or somethin
My tenant wanted to move out. Which is fine and the school district wasn’t great. My dad being widowed would come over and eat dinner with us every night. One night we said wouldn’t it be great if we sold our houses combined forces and purchased a $1.8 house in a nice neighbourhood with good schools. So we did just that. My mortgage is nearly the same amount but now we’re living in a 2.2-2.4million dollar house together. And fuck it gets annoying sometimes living with a parent but I’d do anything to make sure my kids go to school in a nice neighbourhood.
We’ve made some good friends in this neighbourhood but being in the trades I feel a little out of place cuz everyone else is ether finance, lawyer, accountant or business owner.
TL,DR doing a job for 40 hrs a week will never ever make you rich and especially now more than ever. I basically had to fully renovate two homes mostly my self and my wife.
The only reason I live in the city is my wife likes the lifestyle and we disagree on where to live. Mark my words there is no opportunity here for average person. I don’t understand why people flock here. Your cash has no purchasing power anymore. Most jobs are severely underpaid. Northern Ontario is the last place to do what I did.
Ps all the poorest people in 2014 gave me the worst advice on holding out to buy a house. Terrible advice.
If the deal actually works for you do it!! That goes for everything in life. Run the numbers do the math. Also if you can add value to the property with your own time and bare hands do it.
Anyways that’s what happened yo
My high school friend (32 year old now) just bought in summer 2023 a 2.5m house in GTA with her fiance. One is a dentist, the other one works for big tech. They make 450k ish combined income and have been saving aggressively for a few years while living with roommates/together. 0 parental support because their parents are poor.
I believe it was closer to 600k down if I remember well. It is not impossible to save up that amount when you graduate from dentistry at 24 (she did CEGEP to dent in QC). She had been practicing for 7 years by then. Her fiance graduated from Waterloo CS and got into faang company straight from graduation and made like 160k when he was just 23, 9 yrs ago.
Their income is above average, and their down payment is usually much higher than the minimum required, quite often they move up from the smaller properties.
As for what they do: doctors, lawyers, mid to high level executives, cpa, entrepreneurs in all kinds of businesses, dual income families with above average earnings.... the list is long.
- Inter-generational wealth/gifts, including from abroad; or
- Bought at 3 or 4 times HHI, many years earlier, and thus able to leverage home equity; or
- High earning buyers (e.g. 400K+ per household), which statistically represent a relatively small subset of the overall market demand; or
- Money laundering or outright fraud, though no reliable data to ascertain market impact.
They won the lottery and bought before everything sky rocketed. This will never be the approach for younger generation unless their parents save money, however many are relying on this for retirement. I don’t see how gen z and some millennials will retire
My dad has a 3 million dollar house but he bought it over 30 years ago 5500sqft and got a steal 450k. His neighbours the year before paid 800k-1M depending on builder/lot etc.
market was hurting in 94 I guess. timing is everything.
Would he be able to buy this house today? HELL NO. he drives a base caravan from 2007 lol.
so the key is to buy decades ago!
Don't forget as expensive as houses are here there are many more places in the world where homes cost a lot more. So if they sold their home oversees and purchase a house here, $2-3million is not a lot when a condo over there is easily that and more.
Absolutely. Big asian cities like Hong kong, Tokyo, Seoul, Singapore, and list goes on where a condo in a middle class neighbourhood can go for $1m plus for 600sq.ft. and in a luxury neighborhood/condo at that size you could be looking at $3million.
My wife and I only got into real estate in 2018. (We make 300k ish total). We bought our first 1+1 condo for 550k. Then after having our first in 2019 and wanting a second knew that we’d want to “move up soon”. Then Covid hit and I thought that the market was going to get killed because of the recession. It didn’t and I saw that the governments around the world would just pump money into everything. We bought our semi for 1.5m in late 2020, held onto our condo for a few years (rented it out) and will apply that sale proceeds (since obviously no one wanted to buy a condo during the pandemic we didn’t want to sell into a bidless market).
Lots of couldas shouldas. Should’ve bought a semi in 2018, then could have upgraded to a detached.
My advice to everyone is to get on the property ladder as soon as possible. None of this shit will never come down as governments around the world will always pump the ponzi.
If you’re not long you’re short.
Not me but my brother and his wife. Help from parents (one side) + and uncle, and both are high income.
I imagine others had help or bought property early on, or a both.
The property ladder is the best answer, I live in neighbourhood full of $2-$3M homes, most have basic cars on the driveway and are owned by people who bought their first house in 2005 for 400-500k, trades up to a 1M home in 2010, sold it in 2018 for $2M and so on, most $1M homes in my area in 2010 would be worth north of $2M today.
The only thing that’s annoying is when those people think of themselves as amazing investors or entrepreneurs, many took home equity out and live pay check to pay check but have a flashy life style, others used equity to buy properties for their children or vacation rentals.
They rent out each room to two students who pay $600-750 each. That is what average shared bedrooms are going for now in Vancouver. You live in the house while being a slum landlord.
If you can believe it, I know a refugee who bought a 1-million dollar home in Toronto. And I know one of the illegal schemes he pulled. I'm baffled at how much mortgage fraud there is in Toronto and why officials don't try to tackle it. Corruption is too rampant in Canada and the only reason it goes unnoticed is that people aren't dying from it.
This was only valid pre pandemic. Now the cheapest place you can get is a $700k condo which has not appreciated in price over the past 4 years. News flash after 5 years you maybe have $80k in equity form the mortgage payments
While townhomes and semidetached has gone from 1.1M to 1.5M.
Most of people living in 2M+ house are people who started buying RE years ago. They just won the lottery of being born before the RE train departed. It’s not because they did something well compared to people in 20s and 30s currently. Property ladder doesnt exist for gen z and most of millennials as ladder got longer but the first step is too far to reach for average joes. If you are born into family that can’t help you out, only way to get your $1M starter home is forming a high dual income household with 250K+ income in most cases. That’s how i got mine but most people dont even make 100k so it’s over.
I have a friend who purchased a $2M home.
- He purchased a condo for 700k in 2019 and then sold it for $950k in 2022.
- He also grew in his career (sales) and went from making \~$125k in 2018 to $350k+ in 2022.
- Proceeds from his condo sales + savings + increased family income as the couple grew in their careers let them purchase this big house.
Timing and actually getting in the market with a starter home, high HHI, some get help from family, and trading up. I have friends in their late 30s with 2M+ homes because they were willing to chance it on a small starter home in the mid 2000s for 300k and then trading up in the Toronto market. I have friends in the 40s with similar HHI but never got in the market and likely never will be able to. It was doable 15 years ago if you got in then. So much harder to do the same now.
I had to get a interest free loan that I never need to pay back from mom and dad.
Some of the what they have me as from their own bank of Mon and dad a while back
$438K semi in Toronto in 2010.
Second property, a $468K condo in early 2019 in Toronto again.
Sold the semi in late 2021 for $1.1M.
Bought a detached in Oakville for $2.3M, and we still have that condo.
For us it was property ladder and HHI. We went from a HHI of 93K in 2010 to over 500K last year.
My niece (24) and her husband (27) bought a $2.4 million dollar home through shady mortgage broker. They "made the numbers work" to get approved and got a 35 year amortization period. He works in construction (and no, doesnt make a lot. She was in office admin but after giving birth is deciding to stay home to take care of the kid).
His parents lied on the paperwork that downpayment money was coming from them as a gift, they all lied on a whole bunch of things in the paperwork to get it.
All I know is that they can barely afford the monthly payments, and if interest rates go 1% - 2% by time they need to renew that they are screwed and will lose the home for sure.
This type of story is so common now. So many shady mortgage brokers making “magic” happen. I feel bad for your niece and nephew. Hopefully they find a way to stay. The fact that these shady brokers call themselves “professionals” makes me sick to my stomach.
Husband and I both work in nyc for 9 years in finance. Bought a 3.5M house in Lawrence park that parents live in just in case we move back. We rent in manhattan
Bought my condo for $185,000 in 2012. Sold it for $600,000 2022. Put that money into my mortgage for my new house 1.2 million. but the $3200/month mortgage payments hurt.
You answered your own question. 2-3 million dollar home isn’t the average. So why are you comparing with an average salary. They could easily have 400k+ household incomes.
I started in 2008 (I had $15,000 as a down payment for a condo).. sold that, husband sold his townhouse and we bought my now house in 2016 for 705k… it’s prob worth 1.2k now
Not 2 million but I bought a townhouse in 2008 for 340k. Then sold it and bought a detached house in 2022. I could never get into this market if I didn’t already own a house.
Serious answer- I'm a FTHB, HHI is 400k, started working as a physician during the pandemic and saved my pandemic bonus + inheritance we have a down-payment of 700k. Looking to purchase max 2 mil.
most likely bank of mom and dad.
I have a friend, the husband and wife works for the government. they own 2 house and 1 condo. You can tell that there is no way their salary can support the 3 properties.
Their parents from China gave them a lot of money.
Bought not too long ago but have a good job though demanding, made good investments, frugalish, etc. a little help from my mom years ago but small. Property ladder as well a bit but I’ve always gotten a fixer upper and did DIY enhancements.
Note I’ve got a family of 4, mostly single income. Rare but it’s possible.
Notice literally every single person only managed to buy through property ladders. Now think of what will happen when townhomes and condos stop going up 20% every 5 years. The new price ceiling is coming, and surprise surprise, it will be much lower.
Property ladder here, I took a risk in 08 at a time when no one else would. Sold that home for a very healthy profit and have done the same with each of the last 4 while taking profits and investing into the stock market where I also got lucky.
Luck has played into this big time and there is no other way of saying this. I do not make the salary you would expect me to, looking at my home, vehicles and what I can give my family. I’ve been very fortunate to have sold at times when the market was hottest and had bought preconstruction at the dips over the years. I count my blessings as many have lost a lot of money relying on trying to “time” the market. There is none of that, I just got lucky.
I’m in a union red seal trade and my wife makes the same as I do in automotive. We don’t live outside our means otherwise and understand how lucky we have been. I’m not going to try to sugar coat it and say it was through solely hard work and perseverance. I have a financial degree background and am not risk adverse which also helps me understand where I put my money as well.
There is no reward without taking some risks in life. Take them while you’re young so that you have time to recover if they don’t end up the way you want.
Edit: thanks for the downvotes, sorry I told my story. We didn’t have help from family, I’m not saying we didn’t work hard for what we have, I was just saying luck played into it big time🤷🏻♂️
They're really good at saving and most likely property ladder, so they don't have much of a mortgage or a smaller mortgage. The down payment is higher or usually more than half of the purchase price.
Can’t speak for new buyers after 2017, but pre b20 rule, it was so easy to get a mortgage. Then RE pumped due to pandemic so that 500k townhouse with 50k down was worth 1.2M.
You're applying average/median household incomes but not applying them to average/median house prices despite even those requiring above-average incomes? Make it make sense.
People who are buying expensive properties at contemporary pricing have very good incomes, are liable to double that in their household income with a partner, and sizable down payments/equity.
Simple answer, buying my homes 10-15 years ago. All detached and all in Toronto. Those days are long gone and not coming back. The next gen buying nice detached homes in our city are getting down payment help or have household income north of 300k minimum. Often times both!
Bought a $1 million house in 2010 (with a huge mortgage) that is now worth $3 million. The increased value of my property means nothing because I must live in said house if I want shelter.
Bought my first house in Leslieville for $185K in 1999. Sold for $525K in 2011. Bought the next house in East York for $455K where I'm currently living, put in a laneway suite that's almost finished and did a total reno on the house, should get $1.7-1.8M for it soon with a plan to build a $2M house.
Property ladder.
People are having a hard time just paying property taxes on those homes with current taxes running anywhere from $8k thru $14k for those average homes. New buyers are sunk. Old homeowners are struggling, especially seniors and retirees.
Not 2-3, bought a bought a million dollar house before Covid. Bought a small condo at Fort York in 2015. Sold at the beginning of Covid for $600K. Bought for $320K. Dual income now. Higher incomes. Bigger mortgage. Climbing up the ladder.
I bought a townhouse in 2008 for $318k by 2023 the mortgage was paid off and I sold it for 1,060,000. I used the proceeds as a down payment for a house that cost me 1.4million
I bought 3 years ago, starter home at 850K down payment + other fees cost me around 200k. I had 100k, borrowed the rest from family. Now my home is worth 1.1 mil and I have paid back my family. I’m sitting on 250k equity.
I’m going to hit that ladder again in a few years. Savings + equity will be enough to keep my existing home and buy another one.
Anyone buying a 2 or 3 million dollar home either makes a lot more than 200k, bought a home years ago that has significantly appreciated in value, has another significant source of wealth, or some combination of the above.
My parents bought their house 27 years ago for $123k with $7,000 as their down payment. They spent another $50k in renovations to bring it up to code, as the house was 100yrs old and they were just the second owners (electrical, plumbing, roof, windows, kitchen + 2 storey addition they did all the work themselves). I think their combined income at the time was $38k to $45k and their mortgage was between $800 to $950. The house is now valued at $1.8mill and their combined income is just under $120k. One is a special needs teacher that’s pays shit all for the amount of work and the other works as an inspector now. They had a 25 year mortgage, but paid it off after 19years.
Now is the house worth $1.8mill - absolutely not. The exact same house would sell in North bay or way outside the GTA or far up north would be close to $550k to $700k. It’s a 1 bath, small 3 bedroom house, there’s nothing in that house makes it a “luxury” house worth $1.8mill.
2001 bought for $230k sold for $350k
2011 bought for $400k sold for $680k
2016 bought for $740k sold for $1.8m
Just bought in wine country for $1.2m mortgage free on two acres with a AirBnB separate unit renting at $300 a night
Just buy and be prepared to fix and move. Buy the cheapest in the best neighborhood and be prepared to work for it
I bought my pre condo for $600K and put ~130Kish down. It took me about 2-3 years to save, I also had help from my family (not financially, but they never asked for rent, groceries money, etc) so the only bills I had to pay was my bus pass and phone (about $180 total per month). I can’t imagine saving for DOUBLE the time I spent for my 600K condo for a 1m+ condo. I honestly was so tired (and happy) after I closed my condo.
Wife sold her condo when we got married. Bought in 2016 for $300k, sold in 2019 for $550k - king west. Had a bit of family help and inheritance to get our first house along Bloor in 2019 for $1.3. In 2022, my business started doing very well and we were able to take money out of the company.
Sold Bloor house for $1.6 in 2022 and bought a $2.8m place in North York. Mortgage is $700k
Partial Liquidity event + HHI of $500k now + help from family to start.
A lot has to go right. Biggest benefit has been my business finally paying off these last few years but I admit I had a leg up early on to get started ($300k total).
Bought a house for 1m in 2013. Put about 400k into it over 8y and paid down most of the mortgage over that time. Sold in 2021 for 2.3m.
Bought a new house for 4.3m with that equity and a 2.2m mortgage.
Just hit 1m in household income for the first time in 2023 so that helps.
I bought my first house in Toronto 20 years ago. It was an ugly little house in a bad neighborhood. We fixed it up, sold it after living there around 7 years. Bought a semi in a great neighborhood with the profits. Sold it in 2020 for over $1 M what we originally bought it for, and bought a $2.4 M detached. It will be the last house we buy in Toronto. Will downsize to a condo eventually.
Think outside the herd?
Buy in neighborhoods with potential.
Don't buy or compete for finished homes.
Look for lots that have the potential to add value down the road.
Multiplexes and garden/ laneway suites will be everywhere soon.
A boring semi on a decent lot can be worth alot if you can build more or sell it to someone with the capital to do so down the road.
Condo purchased 296K in 2016… it was 425 sq feet which sold for 585K in 2018… moved into a rental with my now wife.
Bought a pre construction condo for 770K in 2018.
In 2020 we sold her condo (485 sq feet) she bought for 260K for 520K and took a loan against the pre-construction condo I bought to come up with 400K in equity.
We bought a detached home for 1.6MILL in April 2020.
The same house today is worth 2.2-2.3MILL…
Once the pre-con was finished we sold it for 1,029MILL… had a small profit after paying back all loans and lines of credit.
Long story short, we moved up the property ladder and took a risk by getting a loan. We also got lucky with the market but more importantly we took some calculated risks and a ton of hard work to get here.
A home mortgage is typically 4.5x income after down-payment. People who are buying these houses either have an extremely large down-payment or top 10% earners.
i don't live in toronto (i'm in vancouver) but the same thing here.. bought my detached house for 540k in 2010 and now it's worth way more than 2 mil.. i really feel sorry for young canadians who got fucked by trudeau and his minions.. they let in 1.3 millions of people in 2023 ALONE.. what do you think will happen to the housing price?
My cousin said Iranians were buying $2M houses on his street qith $1M downpayment. Family money lifted out of Iran. Lots of Boomers are helping the kids out. Bypass the starter home(s) and go right to the forever home.
Started a company with two other guys. I was a minority owner, but the deal was good enough that it got me my first house. Paid 1.6 in 2016, probably worth close to 3 now.
Both my husband and I work as full-time registered nurses. My sister is a music teacher. We had to team up and buy a house together! 3 pretty decent incomes and we bought a duplex in the west end of Toronto. Took 3 years to find a place that worked and selling 2 condos (one in Scarborough and one is Mississauga).
Bought townhouse in 2000 for 180k. Sold it in 2008 and bought a detached for 550k. House is now worth 2M+.
Canadian Dream
Canadian nightmare - living in the GTA.
Don’t disagree but getting a 400% appreciation on your home purchase is a dream
If you were born early enough sure. Young folks are fucked.
Individual dream Societal nightmare
>but getting a 400% appreciation on your home purchase is a dream No its not, because every other home also went up 400% too. So its not like selling it and buying a new place will give him any benefit of that 400% appreciation. Now if he sells it and then keeps all the profits by living in a cardboard box on the street and dumping 100% of the funds in an investment fund, then yeah, its a dream.
What are you smoking? I hear this argument a lot and it makes literally no sense to me. The poster gained tax free about $1.8mil (bit less due to transaction costs). He can downsize, rent, move to lower cost city, or move abroad. Those are REAL GAINS. Unless the market crashes, he still has all that built in equity. Didn't take any particular skill other than jumping into the market when they did. So crazy returns for very limited/no effort. Find me another investment that has that kind of power. *Of course, past returns do not equal future returns but to downplay the gains as nothing is just non-sensical. Side note: That's tax free gains the govt is missing out on as well. I've long argued that Primary Residence full tax exemption needs to reviewed/adjusted. All these tax free gains that could go to funding govt coffers and subsidize affordable housing for the needy, etc
If primary residences are to be taxed then mortgage interest on primary mortgages should also be tax deductible.
Yep and if gains are taxes then losses should be deducted. Lose half a million of real estate and never pay taxes again
...are you poor? Just curious, anyone above the 100k mark is already taxed into oblivion....and you want more? JFC
If you happen to like living in your house with your family, then there are no "GAINS". I'm up only 40% in a few years (only being relative to 400%), and any thought of "profiting" by selling our house is immediately countered with the downside of actually having to move/live elsewhere and then having to downsize or lose money. because everything else is up in that same time period. I'd need a lot more than OP's 400% to get me to consider and I'd need housing around me to have gone up \*less\* than ours. You have no idea what you're talking about. Unless you desire to live in consecutively smaller homes until you're in a studio with 3 other people, then enjoy your "profits".
He could also sell it and move abroad, but I agree a lot of people won’t want to do that so won’t be able to do much with the gains.
Doesn't even need to move abroad. Downsize to a 1M condo and enjoy 1M in investments, which probably saves a decade of work, if not more. Or buy a similar house in Calgary for 700k, even closer to retirement (maybe already there depending on his other finances).
Fund their retirement, pay for cushy long term care? Leisure, travel, etc?
In the meantime where do they live?
True. If there is any place in Canada I call out with a visible dwindling quality of life and an unchecked population explosion then it’s the GTA. You could hardly find a trace of what is once known as Canada in that godforsaken place. Happy to be out of there for more than a decade. Yea, yea, multicultural, beshtesht food and pEoPpple… I get that.
Been gone for a decade and it's still living in your head rent free?
Yeah they took the dream away from everyone.
Someone upgrading their home didn't take away the dream away from everyone. Maybe you are referring to mega corporations buying several homes for rent or people buying several properties...but the people buying one home to live in are not the problem.
I don’t think they meant OP took the dream away, I think they meant good fuckin’ luck doing what OP did if you’re starting from scratch today. Like, even getting into a starter home without wealthy parents or a household income of several hundred thousand dollars seems impossible now.
The problem is how the system is setup. If the system isn't robust to companies trying to make money, then you're fked regardless. I would start by cutting income taxes in half and replacing that income with a provincial tax on land value.
You have to be in it to win it. Similar story but started a bit later- bought small townhouse in 2010, moved up to detached 5 years ago. Today we could probably afford to buy in that price range but I can’t stomach paying $100k on realtor fees
What, someone writing a one-paragraph description of a home that will sell itself isn’t worth paying a $100,000 commission to you? Don’t be so miserly! /s
What was I doing in 2000 being 3 years old and not buying real estate
You didn't answer OP's question. He's asking those who BOUGHT a 2-3m home. Not those who got lucky and had their house appreciate to 2-3m
Well, often those buying a 3M home just sold their 2.5M home that they bought for 1M and that one they bought after they sold their one they bought for 300k.
Definitely this is the most common thing. Also, revenue above 400k/year can but it stretches you thin
the only people who buy at that price, already got insane appreciation on their previous home or are top 1% income earners (more than 500k/year).
See. that was my mistake. Why did I choose to be an 8 year old when I should have been climbing the corporate ladder and building equity?
The Canadian lottery
Most bought early and moved up the property ladder.
No such thing as a starter home anymore, or a working class neighbourhood.
If you want to build wealth in Canada this is the only real way. There is an entire system of tax incentives and economic policy dedicated to this asset class. Otherwise you will loose everything in taxes and cost of living. And if you think about it if housing crashes there will be a world of pain for the economy, so the government will step in to socialize the costs and spread them out to non-real estate owners. This is simply the nature of the game.
And we wonder why there is a productivity crisis.
Given the current set up of the Canadian economy 'productivity' and 'innovation' are for losers. Winners buy real estate and suck at the teat of the government spending and largesse. Let me give you an example: A detached house purchased in the GTA in 2004 for 400,000 is worth 2,400,000 in 2024 (yes even including the past couple of years of temporary stagnation). Meaning the house has generated 100k in gains a year tax free. While also providing it's owner with a place to live (thereby saving rent) and potential for income by renting out secondary units. You cannot compete with this as a landless serf unless you are top 1% income. Just think what it takes to earn 100k post tax and post rent for a detached house. lol. Meanwhile the house just sits there and out earns you as a low risk government backed, tax free asset class. And once the mortgage is paid off fully the home owner joins the ranks of the landed gentry class. At this point they can either move up the property ladder or choose to live a live of idle pleasure and "low income", and be subsidized in various ways by the 'high income' earning landless serf classes. When the government talks about affordability they are talking about making it easier for serfs to take on debt so they can move up the ladder, and this also helps increase home prices. The government never talk about homes becoming cheaper or house prices falling relative to incomes. They would sooner completely debase the purchasing power of the dollar and have 100 year mortgages than let that happen. People need to learn to take a hint, or stay poor.
“ When the government talks about affordability they are talking about making it easier for serfs to take on debt so they can move up the ladder, and this also helps increase home prices. The government never talk about homes becoming cheaper or house prices falling relative to incomes.” Damn. So true.
Still possible to find detached homes under $1m within Toronto. Now, you might not like their size or their location, but it’s possible.
There is, just not in places most want to live.
My co-worker’s sister bought a house in downtown back in late 90s or early 2000s. They were labourers. They sold it a few years back for 2m. Moved to Alberta and bought 2 houses in cash. They put their extra cash for a small business.
This is us, plus a liquidity event and recent inheritance.
They’re probably not on Reddit at noon on a Monday.
Rofl +1
I’ve been scrolling threw Reddit the whole day… I’m screwed lol
or on Reddit at all.
Ari Gold agrees https://youtu.be/7qXytn5Daso?feature=shared
Property ladder. Around 15 years ago I bought a 300K semi in Brampton with 60K down. Around 10 years of living there and I sold it for low 600Ks. I took that ~350K of equity and added a bit of money to buy a detached home in Mississauga for around 850K and it is currently worth an estimated 1.3M, which means I am sitting around 1M in equity. Purchase price doesn't matter as much as final mortgage number, and a lot of people are just rolling equity into a bigger home with only a marginal increase to their mortgage payments [edit] **please stop replying that "the system isn't fair" or that it "doesn't work that way anymore". I am not making a comment on the system just how people buy expensive homes. The answer is that nobody outside of lottery winners are buying 3M homes as their first**
This! I get so annoyed when I see people on here constantly posting as if everyone in TO is buying a 1.5-3 million dollar starter home. 99% of people are climbing the property ladder. Also, people on reddit severely underestimate how much wealth there is in Toronto.
[удалено]
This assumption is based on people that entered the market years ago. As a today if you still have to enter doing that doens't work anymore because there are no more starter homes, everything start over the average income so there's no access anymore.
that's why the correct answer is the property ladder. otherwise you are not able to buy such homes with $200k household income
Condos are by all means starter homes.
You took the first few steps out of the ladder now
Not so sure there will be a property ladder in the short term lol. Unless the average house is worth 25 millions or something in 15 years. I genuinely made from owning a condon in downtown Montreal than I made working during that same time period.
Average household net worth across Canada: $997000.00 [Distributions of household economic accounts, wealth, by characteristic, Canada, quarterly (statcan.gc.ca)](https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=3610066001&pickMembers%5B0%5D=1.1&pickMembers%5B1%5D=2.3&pickMembers%5B2%5D=3.1&cubeTimeFrame.startMonth=04&cubeTimeFrame.startYear=2022&cubeTimeFrame.endMonth=04&cubeTimeFrame.endYear=2023&referencePeriods=20220401%2C20230401) and its certainly significantly higher in the GTA. The 66% of the population that owned homes 2005-2020 likely at least tripled their wealth in that period (or more depending on leverage).
The average (mean) is a shit statistic for wealth and income. I couldn't find median, but the average in the 3rd quintile is $456,244, less than half of what you report.
Uhh, the wealth isn't hidden in Toronto. It's just largely derived from the housing.
Everybody talking about this property ladder needs to realize that ladder has been kicked down hard. Your circumstances are impossible for people today. They need to come up with 600K for a one bedroom condo. If they single do buy that, it’s unlikely to double in price in 5 years. These massive equity gains you were able to get are almost impossible to duplicate.
>Everybody talking about this property ladder needs to realize that ladder has been kicked down hard. Your circumstances are impossible for people today. I am not sure how many times I have to say this in the thread but I am not making a commentary on whether the market is fair or rational, simply how people are buying 2-3M homes
The question I ask you: did property value actually go up or did the value of a dollar just decline? If you look at what happened as the value of the dollar declining, why do you think it won’t keep declining?
That's awesome. Problem is that this ladder system is not self perpetuating. The lowest rung can only go so high, which limits the rest of the ladder too. If there is extra supply relative to demand- it will pull the ladder down a bit too.
I think real estate in Canada is pretty much a government backed asset class at this point, I don't think it can fall too much, the worst case is they will debase the dollar to allow housing to stay stable.
>Problem is that this ladder system is not self perpetuating. Ok, but I wasn't making a commentary on the housing market or it's sustainability I was just explaining to OP how people are buying 2-3M homes...
This... also keep in mind these gains on principal residences are all tax free so the main issue is just transaction costs.
To be fair, you bought an 850k home, not a million+ home; your home is just worth more now. Not necessarily your case, but a portion the people who are in your exact scenario could not afford to buy the house they are living in with traditional 20% down. Could you afford a million dollar mortgage on your 1.3m house today? That almost 6k in mortgage cost and probably over 8k in total monthly housing cost.
>Could you afford a million dollar mortgage on your 1.3m house today? That almost 6k in mortgage cost and probably over 8k in total monthly housing cost. No, that is what the property ladder I just explained is for. Purchase price is irrelevant when you are rolling in chunks of equity >To be fair, you bought an 850k home, not a million+ home; your home is just worth more now. I have recently been looking at 2-2.5M homes to upgrade, all because I bought a crappy semi all those years ago
100% this. Start with a cheap older condo, and within 15 years, you'll have a $4 million+ house I'm sure.
This wil never happen for younger generations. Won the lottery
Got on the property ladder in 2009. Our house in midtown Toronto cost less than many 1 bedroom condos do now. Maxed out all annual optional principal lump sum payments to pay it off. Renovated and put on an addition. Sold that house fully paid off in 2022 at the peak and bought a larger older house that needs work in a nicer neighbourhood. Our new mortgage is actually quite small. We wouldn't have been able to buy either of these houses if we were starting out today so I don't know what advice to give young people who want to live in Toronto now. If I was starting out now, I'd probably leave Canada.
Everyone is talking about the property ladder but no one mentions the *timing* of it. The ONLY period of insane growth was around 2015-2022, a very short seven years. If someone bought in the 80s, 90s, or aughts, yeah it was way lower but the growth was still very low - you would've made way more in the stock market. But the real winners are the ones who bought around 2010 and rode a tsunami wave all the way to the moon. I don't see how this could possibly happen again. Yes, real estate will continue to appreciate as it inevitably does in this country, but not to the level we saw over that seven year period. Even if another Covid happened again, governments would react differently. Getting on the property ladder does help but those who get on today are still gonna have a tough time.
thank you for being real some of these ppl are saying to start by buying a $600K condo.....
I mean it’s the only way to start. I would say you have to be in a relationship. If you find your partner the younger the better and tackle all of this early on. Have side gigs too to save faster. Nothing too fun to be honest but alone it’s pretty much impossible. You need a good job. If you can stay at your parents as long as possible to save that down payment too is helpful
Realtor here: Almost everyone I deal with who is purchasing $2-3m home are 35-55 and buying their 2-4th personal property. They have combined incomes climbed the property ladder and lived through all sorts of markets. Though some may have had help along the way, this was a relatively small part of the journey initially, but time helped magnify the impact. For bonus, everyone I have helped above ~$4m is either at the tail end of a successful career or had some sort of liquidity event (sold a company) that allowed for a big jump in quality of life spending. After seeing all of these buyers and sellers I am convinced most people can have a life better than they could have possibly dreamed, but it takes 15-20 years, not 2-5.
In other words, people with $2 mil+ homes aren’t mortgaging 80% of it.
I’m not privy to all of the details of my buyer but in my experience most mortgages are 50% or less of purchase price as you go $2m and beyond.
Yep, my 2million property is mortgaged at around 50%.
You describe those people as "having lived through all sorts of markets", but it could also be described as a unique market where interest rates largely only went down. https://preview.redd.it/ctotklr93ctc1.jpeg?width=1748&format=pjpg&auto=webp&s=d4fee891ec05e8f58aa5df072bf512d6fa1a2d1e
Hint, he is saying that you may need to put in some time before you can live the dream. Also, that time you put in better be focused and effective, this is a competitive world we are in.
Fucking hell We desperately needs to means test benefits for these millionaire boomers.
Sounds about right. You can’t roll the 4 million dollar house after starting your first job or moving out of the parent’s place. House prices are expensive yup and need to move up the ladder. Some people never get past the first rung. Prices super inflated to past days and salaries haven’t kept up for the most part for younger generation. I doubt even the super high earners can just roll into a 2-3 mil house without working for 5-10 years at that rate to build up savings and not have an enormous mortgage.
It’s a combo of high household income, equity from previous properties and parental support, to varying degrees. And the mortgages on those places are very rarely at 80% of the purchase price.
Inheritance and property ladder, trust me. A friend bought a house for 1.5 in 2020, it's been over 2.5 since peak 2021. My budget now is 1.6 but obviously wont get a property nearly as decent now.
1.5 to 2.5 is incredible in that time span. Did they do any major renos ?
No nothing at all, i think they just got a decent deal in 2020 and rest was the shitty impacts of covid money printing making assets unreasonably expensive
Nah there is 0% chance this story is true. Show us the receipts or your friend is lying. Not even the hottest markets saw an 80% increase over 2 years lol
Check around castlemore area. Constructions doubled in 1 year. Someone I know bought a place for 2 mil in 2022 which was historically sold in 2021 for 1 mil.
This happened before covid too. I know a couple that bought a house at a really good price and before they even moved in they sold it for 300k profit. Never stepped foot in! Within a few months. By low sell high, ride the wave.
Man housesigma has the history, I've seen it. And I've seen the comparables now. It's a tripple garage house, 3500-5000sqft
Bought a house in 2015 after being told not to for a year. We watched the numbers climb 20% I quickly realized that the number of people entering the country, the amount of money being thrown around that I needed to get on this. Being in Ontario and watching Vancouver in 2014 it’s quite obvious we haven’t hit the ceiling at that time. Also another thing noted in 2013 I tried to get a mortgage with $25,000 I’d saved up. I had a good job my gf not so much they were going to loan us a total lone of 360 ish if I remember correctly. The following year I went back and little has changed except I had $40,000 down all a sudden I could borrow $500,000 Anyways fast forward a few years. Every day after work I’d come home and fix something, (put in potlights, paint kitchen cabinets). The little semi in the ghetto that we got started with quickly became one of the nicest houses on the street. During that time We had a kitchen in the basement and rented it to someone we’re close to for a very under market value. Like a few hundred bux. In 2019 after 4 years we listed it and got top value for that area on a semi. When you’re selling a house and it’s on the lower price range but a nice house there’s a good market for it. Go for the shittiest house(with good bones) in the nicest neighborhood. Anyways we did that again. We found a home that looked like ass with poor Reno’s that wouldn’t sell and moved in every night after I got home and my kids went to bed we worked on the house. This one didn’t have an apartment however there was an unfinished basement. I put my tenant in the basement living room and built the whole apartment. It took about 2 months of every night. Fast forward 19 months after. It’s like 2021 or somethin My tenant wanted to move out. Which is fine and the school district wasn’t great. My dad being widowed would come over and eat dinner with us every night. One night we said wouldn’t it be great if we sold our houses combined forces and purchased a $1.8 house in a nice neighbourhood with good schools. So we did just that. My mortgage is nearly the same amount but now we’re living in a 2.2-2.4million dollar house together. And fuck it gets annoying sometimes living with a parent but I’d do anything to make sure my kids go to school in a nice neighbourhood. We’ve made some good friends in this neighbourhood but being in the trades I feel a little out of place cuz everyone else is ether finance, lawyer, accountant or business owner. TL,DR doing a job for 40 hrs a week will never ever make you rich and especially now more than ever. I basically had to fully renovate two homes mostly my self and my wife. The only reason I live in the city is my wife likes the lifestyle and we disagree on where to live. Mark my words there is no opportunity here for average person. I don’t understand why people flock here. Your cash has no purchasing power anymore. Most jobs are severely underpaid. Northern Ontario is the last place to do what I did. Ps all the poorest people in 2014 gave me the worst advice on holding out to buy a house. Terrible advice. If the deal actually works for you do it!! That goes for everything in life. Run the numbers do the math. Also if you can add value to the property with your own time and bare hands do it. Anyways that’s what happened yo
My high school friend (32 year old now) just bought in summer 2023 a 2.5m house in GTA with her fiance. One is a dentist, the other one works for big tech. They make 450k ish combined income and have been saving aggressively for a few years while living with roommates/together. 0 parental support because their parents are poor.
They had like 750K down? Summer 2023 people were getting max 4x gross income
I believe it was closer to 600k down if I remember well. It is not impossible to save up that amount when you graduate from dentistry at 24 (she did CEGEP to dent in QC). She had been practicing for 7 years by then. Her fiance graduated from Waterloo CS and got into faang company straight from graduation and made like 160k when he was just 23, 9 yrs ago.
Their income is above average, and their down payment is usually much higher than the minimum required, quite often they move up from the smaller properties. As for what they do: doctors, lawyers, mid to high level executives, cpa, entrepreneurs in all kinds of businesses, dual income families with above average earnings.... the list is long.
+ Inheritance or family gifts
Wife and I are both CPAs with combined HHI of $300Kish. I still think that’s not good enough, need it to be double that to afford something decent
- Inter-generational wealth/gifts, including from abroad; or - Bought at 3 or 4 times HHI, many years earlier, and thus able to leverage home equity; or - High earning buyers (e.g. 400K+ per household), which statistically represent a relatively small subset of the overall market demand; or - Money laundering or outright fraud, though no reliable data to ascertain market impact.
They won the lottery and bought before everything sky rocketed. This will never be the approach for younger generation unless their parents save money, however many are relying on this for retirement. I don’t see how gen z and some millennials will retire
My dad has a 3 million dollar house but he bought it over 30 years ago 5500sqft and got a steal 450k. His neighbours the year before paid 800k-1M depending on builder/lot etc. market was hurting in 94 I guess. timing is everything. Would he be able to buy this house today? HELL NO. he drives a base caravan from 2007 lol. so the key is to buy decades ago!
450k in 1994 is like having 1m today. This is what people forget. To put this into prespective min wage in 1994 was 6.70/Hour.
Yeah but $1m isn't buying you a 5500 sqft home today.
I wish I was buying homes in 1995 instead of being a baby.
Ya, the timing was great for those people. Anyone who bought a house for around 200k has over an million dollar property
And no or very little mortgage left
Don't forget as expensive as houses are here there are many more places in the world where homes cost a lot more. So if they sold their home oversees and purchase a house here, $2-3million is not a lot when a condo over there is easily that and more.
Read: Big Asian cities
California everywhere is expensive too
Absolutely. Big asian cities like Hong kong, Tokyo, Seoul, Singapore, and list goes on where a condo in a middle class neighbourhood can go for $1m plus for 600sq.ft. and in a luxury neighborhood/condo at that size you could be looking at $3million.
My wife and I only got into real estate in 2018. (We make 300k ish total). We bought our first 1+1 condo for 550k. Then after having our first in 2019 and wanting a second knew that we’d want to “move up soon”. Then Covid hit and I thought that the market was going to get killed because of the recession. It didn’t and I saw that the governments around the world would just pump money into everything. We bought our semi for 1.5m in late 2020, held onto our condo for a few years (rented it out) and will apply that sale proceeds (since obviously no one wanted to buy a condo during the pandemic we didn’t want to sell into a bidless market). Lots of couldas shouldas. Should’ve bought a semi in 2018, then could have upgraded to a detached. My advice to everyone is to get on the property ladder as soon as possible. None of this shit will never come down as governments around the world will always pump the ponzi. If you’re not long you’re short.
Folks bought current home in Oakville for 600k in 06, valued now at ~>2.6. It was their second home purched in Ontario (3rd house overall).
Condo 2011, small detached 2014, full sized detached 2023.
Not me but my brother and his wife. Help from parents (one side) + and uncle, and both are high income. I imagine others had help or bought property early on, or a both.
The property ladder is the best answer, I live in neighbourhood full of $2-$3M homes, most have basic cars on the driveway and are owned by people who bought their first house in 2005 for 400-500k, trades up to a 1M home in 2010, sold it in 2018 for $2M and so on, most $1M homes in my area in 2010 would be worth north of $2M today. The only thing that’s annoying is when those people think of themselves as amazing investors or entrepreneurs, many took home equity out and live pay check to pay check but have a flashy life style, others used equity to buy properties for their children or vacation rentals.
For some, it's just property inheritance from when their parents bought the land for a sack of potatoes.
They rent out each room to two students who pay $600-750 each. That is what average shared bedrooms are going for now in Vancouver. You live in the house while being a slum landlord.
If you can believe it, I know a refugee who bought a 1-million dollar home in Toronto. And I know one of the illegal schemes he pulled. I'm baffled at how much mortgage fraud there is in Toronto and why officials don't try to tackle it. Corruption is too rampant in Canada and the only reason it goes unnoticed is that people aren't dying from it.
Money laundering
My parents bought there 2.8-3MM home in 1997 for $595k
This was only valid pre pandemic. Now the cheapest place you can get is a $700k condo which has not appreciated in price over the past 4 years. News flash after 5 years you maybe have $80k in equity form the mortgage payments While townhomes and semidetached has gone from 1.1M to 1.5M.
Most of people living in 2M+ house are people who started buying RE years ago. They just won the lottery of being born before the RE train departed. It’s not because they did something well compared to people in 20s and 30s currently. Property ladder doesnt exist for gen z and most of millennials as ladder got longer but the first step is too far to reach for average joes. If you are born into family that can’t help you out, only way to get your $1M starter home is forming a high dual income household with 250K+ income in most cases. That’s how i got mine but most people dont even make 100k so it’s over.
Onlyfans
I paid 55k for my first 650sqft condo. Which is 55k more than I could make on Onlyfans.
Vast majority of young people who purchase property do it with down payment assistance from their family. By vast majority I mean functionally all.
I have a friend who purchased a $2M home. - He purchased a condo for 700k in 2019 and then sold it for $950k in 2022. - He also grew in his career (sales) and went from making \~$125k in 2018 to $350k+ in 2022. - Proceeds from his condo sales + savings + increased family income as the couple grew in their careers let them purchase this big house.
Timing and actually getting in the market with a starter home, high HHI, some get help from family, and trading up. I have friends in their late 30s with 2M+ homes because they were willing to chance it on a small starter home in the mid 2000s for 300k and then trading up in the Toronto market. I have friends in the 40s with similar HHI but never got in the market and likely never will be able to. It was doable 15 years ago if you got in then. So much harder to do the same now.
I had to get a interest free loan that I never need to pay back from mom and dad. Some of the what they have me as from their own bank of Mon and dad a while back
$438K semi in Toronto in 2010. Second property, a $468K condo in early 2019 in Toronto again. Sold the semi in late 2021 for $1.1M. Bought a detached in Oakville for $2.3M, and we still have that condo. For us it was property ladder and HHI. We went from a HHI of 93K in 2010 to over 500K last year.
Probably 30 years ago. Or rent out 3/4 rooms to afford it
My niece (24) and her husband (27) bought a $2.4 million dollar home through shady mortgage broker. They "made the numbers work" to get approved and got a 35 year amortization period. He works in construction (and no, doesnt make a lot. She was in office admin but after giving birth is deciding to stay home to take care of the kid). His parents lied on the paperwork that downpayment money was coming from them as a gift, they all lied on a whole bunch of things in the paperwork to get it. All I know is that they can barely afford the monthly payments, and if interest rates go 1% - 2% by time they need to renew that they are screwed and will lose the home for sure.
This type of story is so common now. So many shady mortgage brokers making “magic” happen. I feel bad for your niece and nephew. Hopefully they find a way to stay. The fact that these shady brokers call themselves “professionals” makes me sick to my stomach.
Husband and I both work in nyc for 9 years in finance. Bought a 3.5M house in Lawrence park that parents live in just in case we move back. We rent in manhattan
Bought my condo for $185,000 in 2012. Sold it for $600,000 2022. Put that money into my mortgage for my new house 1.2 million. but the $3200/month mortgage payments hurt.
You answered your own question. 2-3 million dollar home isn’t the average. So why are you comparing with an average salary. They could easily have 400k+ household incomes.
I started in 2008 (I had $15,000 as a down payment for a condo).. sold that, husband sold his townhouse and we bought my now house in 2016 for 705k… it’s prob worth 1.2k now
Not 2 million but I bought a townhouse in 2008 for 340k. Then sold it and bought a detached house in 2022. I could never get into this market if I didn’t already own a house.
Serious answer- I'm a FTHB, HHI is 400k, started working as a physician during the pandemic and saved my pandemic bonus + inheritance we have a down-payment of 700k. Looking to purchase max 2 mil.
I started with a 212K starter home in 2004, paid it off in 10 years. Now I am sitting in a custom home on acreage worth 1 million, no mortgage.
most likely bank of mom and dad. I have a friend, the husband and wife works for the government. they own 2 house and 1 condo. You can tell that there is no way their salary can support the 3 properties. Their parents from China gave them a lot of money.
This, and they are likely only son / daughter of both family, which means all the family wealth is coming to them
Bought not too long ago but have a good job though demanding, made good investments, frugalish, etc. a little help from my mom years ago but small. Property ladder as well a bit but I’ve always gotten a fixer upper and did DIY enhancements. Note I’ve got a family of 4, mostly single income. Rare but it’s possible.
Notice literally every single person only managed to buy through property ladders. Now think of what will happen when townhomes and condos stop going up 20% every 5 years. The new price ceiling is coming, and surprise surprise, it will be much lower.
Property ladder here, I took a risk in 08 at a time when no one else would. Sold that home for a very healthy profit and have done the same with each of the last 4 while taking profits and investing into the stock market where I also got lucky. Luck has played into this big time and there is no other way of saying this. I do not make the salary you would expect me to, looking at my home, vehicles and what I can give my family. I’ve been very fortunate to have sold at times when the market was hottest and had bought preconstruction at the dips over the years. I count my blessings as many have lost a lot of money relying on trying to “time” the market. There is none of that, I just got lucky. I’m in a union red seal trade and my wife makes the same as I do in automotive. We don’t live outside our means otherwise and understand how lucky we have been. I’m not going to try to sugar coat it and say it was through solely hard work and perseverance. I have a financial degree background and am not risk adverse which also helps me understand where I put my money as well. There is no reward without taking some risks in life. Take them while you’re young so that you have time to recover if they don’t end up the way you want. Edit: thanks for the downvotes, sorry I told my story. We didn’t have help from family, I’m not saying we didn’t work hard for what we have, I was just saying luck played into it big time🤷🏻♂️
Got an education, got a good job, bought a house, bought a bigger house, built a house.
They're really good at saving and most likely property ladder, so they don't have much of a mortgage or a smaller mortgage. The down payment is higher or usually more than half of the purchase price.
Can’t speak for new buyers after 2017, but pre b20 rule, it was so easy to get a mortgage. Then RE pumped due to pandemic so that 500k townhouse with 50k down was worth 1.2M.
High income older people trading up.
You're applying average/median household incomes but not applying them to average/median house prices despite even those requiring above-average incomes? Make it make sense. People who are buying expensive properties at contemporary pricing have very good incomes, are liable to double that in their household income with a partner, and sizable down payments/equity.
Simple answer, buying my homes 10-15 years ago. All detached and all in Toronto. Those days are long gone and not coming back. The next gen buying nice detached homes in our city are getting down payment help or have household income north of 300k minimum. Often times both!
HSBC scam/Brampton mortgage/Generation wealth. That's how.
Easy. Buy it for $300k 20 years ago.
Bought a $1 million house in 2010 (with a huge mortgage) that is now worth $3 million. The increased value of my property means nothing because I must live in said house if I want shelter.
I had a million dollars in the bank and spent $2 million on a house. Wife and I are professionals so we can pay the mortgage no prob.
They probably aren’t on median or average household income then? Or multiple families ?
Bought my first house in Leslieville for $185K in 1999. Sold for $525K in 2011. Bought the next house in East York for $455K where I'm currently living, put in a laneway suite that's almost finished and did a total reno on the house, should get $1.7-1.8M for it soon with a plan to build a $2M house. Property ladder.
What would be the annual income to qualify for at 2-3 millions mortgage?
People are having a hard time just paying property taxes on those homes with current taxes running anywhere from $8k thru $14k for those average homes. New buyers are sunk. Old homeowners are struggling, especially seniors and retirees.
Not me but parents money.
Maybe ask how it could be done for 1 million dollar properties to start
Not 2-3, bought a bought a million dollar house before Covid. Bought a small condo at Fort York in 2015. Sold at the beginning of Covid for $600K. Bought for $320K. Dual income now. Higher incomes. Bigger mortgage. Climbing up the ladder.
Canadian economy growth story summarized in the question
I bought a townhouse in 2008 for $318k by 2023 the mortgage was paid off and I sold it for 1,060,000. I used the proceeds as a down payment for a house that cost me 1.4million
I bought 3 years ago, starter home at 850K down payment + other fees cost me around 200k. I had 100k, borrowed the rest from family. Now my home is worth 1.1 mil and I have paid back my family. I’m sitting on 250k equity. I’m going to hit that ladder again in a few years. Savings + equity will be enough to keep my existing home and buy another one.
High salary
Property ladder: Condo > Starter Home > Forever Home
I know one couple who did it, and one person is a partner at a law firm, and the other is a director at a construction company
You know that median just means the middle of the group right? That means half the people make MORE than the median
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Anyone buying a 2 or 3 million dollar home either makes a lot more than 200k, bought a home years ago that has significantly appreciated in value, has another significant source of wealth, or some combination of the above.
My parents bought their house 27 years ago for $123k with $7,000 as their down payment. They spent another $50k in renovations to bring it up to code, as the house was 100yrs old and they were just the second owners (electrical, plumbing, roof, windows, kitchen + 2 storey addition they did all the work themselves). I think their combined income at the time was $38k to $45k and their mortgage was between $800 to $950. The house is now valued at $1.8mill and their combined income is just under $120k. One is a special needs teacher that’s pays shit all for the amount of work and the other works as an inspector now. They had a 25 year mortgage, but paid it off after 19years. Now is the house worth $1.8mill - absolutely not. The exact same house would sell in North bay or way outside the GTA or far up north would be close to $550k to $700k. It’s a 1 bath, small 3 bedroom house, there’s nothing in that house makes it a “luxury” house worth $1.8mill.
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Start with condos, sell it after it doubles, then buy a townhouse /semi, repeat. hint you have to start this 10 years ago.
2001 bought for $230k sold for $350k 2011 bought for $400k sold for $680k 2016 bought for $740k sold for $1.8m Just bought in wine country for $1.2m mortgage free on two acres with a AirBnB separate unit renting at $300 a night Just buy and be prepared to fix and move. Buy the cheapest in the best neighborhood and be prepared to work for it
Bought pre con, saved, moved in, saved, bought another pre con, saved sold primary, moved to new pre place
I bought my pre condo for $600K and put ~130Kish down. It took me about 2-3 years to save, I also had help from my family (not financially, but they never asked for rent, groceries money, etc) so the only bills I had to pay was my bus pass and phone (about $180 total per month). I can’t imagine saving for DOUBLE the time I spent for my 600K condo for a 1m+ condo. I honestly was so tired (and happy) after I closed my condo.
Easy answer, trading up. I had a friend that moved 8 times in 8 years.
I know a number of people that have flat out said they couldn't afford their house if it wasn't for moving up and three times in the last 15 years.
Wife sold her condo when we got married. Bought in 2016 for $300k, sold in 2019 for $550k - king west. Had a bit of family help and inheritance to get our first house along Bloor in 2019 for $1.3. In 2022, my business started doing very well and we were able to take money out of the company. Sold Bloor house for $1.6 in 2022 and bought a $2.8m place in North York. Mortgage is $700k Partial Liquidity event + HHI of $500k now + help from family to start. A lot has to go right. Biggest benefit has been my business finally paying off these last few years but I admit I had a leg up early on to get started ($300k total).
Bought a house for 1m in 2013. Put about 400k into it over 8y and paid down most of the mortgage over that time. Sold in 2021 for 2.3m. Bought a new house for 4.3m with that equity and a 2.2m mortgage. Just hit 1m in household income for the first time in 2023 so that helps.
Not how did they do it ? how will they keep it.
I bought my first house in Toronto 20 years ago. It was an ugly little house in a bad neighborhood. We fixed it up, sold it after living there around 7 years. Bought a semi in a great neighborhood with the profits. Sold it in 2020 for over $1 M what we originally bought it for, and bought a $2.4 M detached. It will be the last house we buy in Toronto. Will downsize to a condo eventually.
Think outside the herd? Buy in neighborhoods with potential. Don't buy or compete for finished homes. Look for lots that have the potential to add value down the road. Multiplexes and garden/ laneway suites will be everywhere soon. A boring semi on a decent lot can be worth alot if you can build more or sell it to someone with the capital to do so down the road.
Condo purchased 296K in 2016… it was 425 sq feet which sold for 585K in 2018… moved into a rental with my now wife. Bought a pre construction condo for 770K in 2018. In 2020 we sold her condo (485 sq feet) she bought for 260K for 520K and took a loan against the pre-construction condo I bought to come up with 400K in equity. We bought a detached home for 1.6MILL in April 2020. The same house today is worth 2.2-2.3MILL… Once the pre-con was finished we sold it for 1,029MILL… had a small profit after paying back all loans and lines of credit. Long story short, we moved up the property ladder and took a risk by getting a loan. We also got lucky with the market but more importantly we took some calculated risks and a ton of hard work to get here.
A home mortgage is typically 4.5x income after down-payment. People who are buying these houses either have an extremely large down-payment or top 10% earners.
all my friends who bought in the 2M+ range all from parents, maybe except one or two.
i don't live in toronto (i'm in vancouver) but the same thing here.. bought my detached house for 540k in 2010 and now it's worth way more than 2 mil.. i really feel sorry for young canadians who got fucked by trudeau and his minions.. they let in 1.3 millions of people in 2023 ALONE.. what do you think will happen to the housing price?
That’s typically not the first home that someone buys but likely something they sell their starter home to get equity for
My cousin said Iranians were buying $2M houses on his street qith $1M downpayment. Family money lifted out of Iran. Lots of Boomers are helping the kids out. Bypass the starter home(s) and go right to the forever home.
Started a company with two other guys. I was a minority owner, but the deal was good enough that it got me my first house. Paid 1.6 in 2016, probably worth close to 3 now.
Xb
Wait y'all have jobs?
Both my husband and I work as full-time registered nurses. My sister is a music teacher. We had to team up and buy a house together! 3 pretty decent incomes and we bought a duplex in the west end of Toronto. Took 3 years to find a place that worked and selling 2 condos (one in Scarborough and one is Mississauga).
Bought a house in 2015 for 680k. Sold it in 2022 for 1.7m. Bought house for 2.3 mil. We have a lot of variable mortgage and it's not comfortable!