You make $75,000 per year. Will you ever be able to afford a Toronto house?
Owning a house in Toronto is a dream for thousands of people that continues to feel further and further out of reach.
With the average price of a Toronto home now above $1 million, many discouraged people sitting on the sidelines are wondering if the dream will ever become a reality.
This week, CTV News Toronto asked Chief Financial Commentator Patricia Lovett-Reid if it will ever be possible to own a home in Toronto if you're a single-income earner making around $75,000.
Lovett-Reid says the "harsh reality" is no.
"On $75,000 per year in Toronto, it isn't going to happen," Lovett-Reid said. "Unless you really are getting financial help from your parents."
She said that even if you’re able to come up with enough money for the down payment, people making around $75,000 per year will struggle with making ends meet on a day-to-day basis.
A new home is displayed for sale in a new housing development in Ottawa on Tuesday, July 14, 2020. (THE CANADIAN PRESS / Sean Kilpatrick)
Between making mortgage payments and service fees, Lovett-Reid said you simply "can't do the math."
She estimates that in order to comfortably pay all the fees associated with a $1 million house, you would need about $200,000 of income per year.
Lovett-Reid said that purchasing a "very small" condo might be an option, but with $75,000 per year it will still be a stretch.
So what should you do?
Lovett-Reid said it's all about compromise.
"You can’t have it all at the same time," she said.
For people who are set on buying a home, Lovett-Reid suggests continuing to save aggressively, while also looking to purchase in areas outside of the city.
"Be prepared to know what you will do and won’t do," she said. "Are you prepared to commute? If so, great. Look for a place on a commuter line."
And for those not willing to leave the city? Lovett-Reid said people should not be discouraged.
"There's nothing wrong with renting," she said. "There is nothing wrong with saying 'This imbalance in the market means I'm going to stay on the sidelines.'"
'I think it's an old paradigm where a rite of passage into adulthood means you own a home. It doesn't. It's just not the reality that today’s millennials are facing."
A CIBC report, released last month, found that Canadian parents are giving their children record amounts of money to purchase a home.
About 30 per cent of first-time home buyers received financial help from family this past year, the report found. CIBC said they were given an average of $82,000 to help with their down payment.
According to the Toronto Regional Real Estate Board, the average price of a detached home that sold in the city in September was $1.7 million.
The average for a semi-detached that sold was $1.3 million, while a townhouse was $930,000.
The average selling price of a condo in September was $744,730.
Do you have a financial question or topic you would like Pattie Lovett-Reid discuss? E-mail torontotips@bellmedia.ca.
CTVNews.ca Top Stories
More than 115 cases of eye damage reported in Ontario after solar eclipse
More than 115 people who viewed the solar eclipse in Ontario earlier this month experienced eye damage after the event, according to eye doctors in the province.
Toxic testing standoff: Family leaves house over air quality
A Sherwood Park family says their new house is uninhabitable. The McNaughton's say they were forced to leave the house after living there for only a week because contaminants inside made it difficult to breathe.
Decoy bear used to catch man who illegally killed a grizzly, B.C. conservation officers say
A man has been handed a lengthy hunting ban and fined thousands of dollars for illegally killing a grizzly bear, B.C. conservation officers say.
B.C. seeks ban on public drug use, dialing back decriminalization
The B.C. NDP has asked the federal government to recriminalize public drug use, marking a major shift in the province's approach to addressing the deadly overdose crisis.
OPP responds to apparent video of officer supporting anti-Trudeau government protestors
The Ontario Provincial Police (OPP) says it's investigating an interaction between a uniformed officer and anti-Trudeau government protestors after a video circulated on social media.
An emergency slide falls off a Delta Air Lines plane, forcing pilots to return to JFK in New York
An emergency slide fell off a Delta Air Lines jetliner shortly after takeoff Friday from New York, and pilots who felt a vibration in the plane circled back to land safely at JFK Airport.
Sophie Gregoire Trudeau on navigating post-political life, co-parenting and freedom
Sophie Gregoire Trudeau says there is 'still so much love' between her and Prime Minister Justin Trudeau, as they navigate their post-separation relationship co-parenting their three children.
Last letters of pioneering climber who died on Everest reveal dark side of mountaineering
George Mallory is renowned for being one of the first British mountaineers to attempt to scale the dizzying heights of Mount Everest during the 1920s. Nearly a century later, newly digitized letters shed light on Mallory’s hopes and fears about ascending Everest.
Loud boom in Hamilton caused by propane tank, police say
A loud explosion was heard across Hamilton on Friday after a propane tank was accidentally destroyed and detonated at a local scrap metal yard, police say.