Moving on up? Not in this Canadian housing market

Wed Jun 8, 2016 5:03pm EDT
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By Julie Gordon and Andrea Hopkins

VANCOUVER/TORONTO (Reuters) - Kathe Sanz was optimistic when she and her husband started looking for a larger home. Their Toronto townhouse had nearly doubled in value since they bought it and their C$1.1 million budget seemed rich enough to move up the property ladder.

But the housing market in Canada's largest cities has priced out many would-be buyers, leaving them stuck in their current homes as new listings hit six-year lows and prices soar.

The national average price of a home in Canada hit C$539,400 in April, according to CREA. The average price of a detached home in central Toronto hit C$1.29 million in May, up 15.2 percent on the year, according to the Toronto Real Estate Board.

"It got really disheartening, really fast," said Sanz, after the couple watched a semi-detached house listed under their budget sell for hundreds of thousands of dollars beyond their price range, despite needing major repairs.

The same thing happened with the next home, and the next, and the next. So the couple, a sales professional and a lawyer, find themselves trapped, unable to make the leap to a detached home.

"It's ridiculous to think that we're both 35 and we have a $1.1 million budget, but we can't afford a stand-alone house," said Sanz.

Home sales in Toronto and Vancouver often attract multiple bidders, driving up prices and forcing buyers to waive inspections, financing clauses and to buy sight unseen.

Canadian Finance Minister Bill Morneau on Wednesday called the hot housing market a "very real issue."   Continued...

A construction worker works on a new house being built in a suburb located north of Toronto in Vaughan, Ontario Canada, June 29, 2015. REUTERS/Mark Blinch/File Photo