This is the first installment of Priced Out, a three-part series looking at housing affordability challenges facing young people in Canada.
Paddy Treacy calls himself and his fiance “dinks,” short for “dual income, no kids.” At 29, the Toronto-based small-business owner runs a restaurant-servicing company, which, before the COVID-19 pandemic, was the source of half of the couple’s annual income of around $150,000.
But despite having two solid paycheques and few significant financial outlays for years, Treacy and his partner lack what is increasingly a prerequisite for homeownership in Canada: a generous loan or gift from the bank of mom and dad, also known as BOMAD.
Treacy has a friend who recently bought with help from his father. The house was in Dartmouth, N.S., where home prices now average more than $370,000, a nearly 40-per-cent jump since a year ago but still eminently affordable compared to much of southern Ontario.
For his part, Treacy says he and his partner are prepared to live anywhere within a two- to three-hour ride from Toronto. The couple had been eyeing Guelph, Ont., as a possible home base, but real estate prices, which have climbed by more than 30 per cent since the onset of the pandemic, are out of reach now there too.
“Even if we leave the city, there’s nowhere to go,” says Treacy.
A cash injection from parents or grandparents has for years been a necessary oomph for many young homebuyers in Vancouver and Toronto, two of Canada’s priciest real estate markets. But with mind-boggling home-price increases spreading from coast to coast and through suburbs and smaller towns during the pandemic, aspiring homeowners without family financing are running out of options.
Real estate craze and BOMAD worsening inequality
The housing market has contributed to rising economic inequality for years, and the pandemic real estate craze has accelerated that trend, says Ricardo Tranjan, a political economist and senior researcher with the Canadian Centre for Policy Alternatives.
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Source: globalnews.ca
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