Chace Barber is 35 years old and you could call him a job creator. The serial entrepreneur owns two small businesses, one of which has 11 full-time employees and has raised upward of $1.5 million from private equity to date, per CB Insights. And yet, the bank won’t give him a mortgage. It’s why he lives in his parents’ basement in Merritt, a city in British Columbia, Canada. “They look at me and my business partner, who also still can’t buy a house, and say, ‘oh, sorry, ‘you’re a little bit too risky,’” Barber told Fortune.
Whenever Barber has spoken with a lender, he says they’ve told him that they need to see a three-year business history and a stable income for the same amount of time, but he can’t do that because he was putting his earnings back into his companies and only paying himself what he needed to get by. Either way, he was told he needed to save enough money to put 20% down as a business owner.
To him, the funny thing is, some of his full-time employees have been approved for mortgages by now. Meanwhile, Barber and his business partner have had no luck, despite bringing in steady revenue on one business and getting another off the ground. He does have some money saved for a down payment, but by the time he hit the market, the Pandemic Housing Boom had put prices—and mortgage rates—out of his wheelhouse.
“Housing prices increased, so that 20% down doesn’t cover what I need…the prices went up to the point where that money I saved was no longer enough to buy a house,” Barber said.
Canada’s housing market is still severely unaffordable for some buyers, despite a recent (and somewhat short-lived) decline in home prices from the peak and fewer home sales across the country as the Bank of Canada raised interest rates—which “barely makes a dent in reversing the enormous loss of affordability since mid-2020,” according to the Royal Bank of Canada (RBC).
Home prices across British Columbia, specifically, have gone up 2.9% in the last year to an average of C$1,017,979, according to the Canadian Real Estate Association. And not unlike the U.S., Canada’s housing market is suffering from severely low supply, with roughly three months of inventory as of May. Back in February of this year, Diana Mok, a professor of real estate finance and economics at Western University, toldFortune that the average Canadian’s income is around ten times less than the average home price, when discussing the country’s ban on foreign residential buyers—a move that looked like an attempt to improve housing affordability that experts quickly dispelled.
When Barber was trying to save up to buy a house, he’d increased his personal income to C$60,000. With that, he saved up about C$40,000—but to him, that doesn’t really matter anymore.
“I basically gave up on buying a house after COVID, after the last two years,” Barber said.
He looked into buying his parents’ home, where he’s currently living and running his business out of, but that’s no longer feasible, at least for the time being. In 2019, his parents’ house was valued at C$638,000. Roughly four years later, and it’s now valued at C$1,262,000, according to a property assessment Barber shared with Fortune—that’s almost double.
When he moved into his parents’ basement more than two years ago, Barber said he was tired of feeling like he was paying off someone else’s mortgage, given he was paying more than C$3,000 a month for rent. He was single at the time, so he figured he’d move into his parents’ basement and save up (although he does pay some rent). But as we know, the house just became too unaffordable for him.
“I went with plan B,” Barber said. “I’m building my own house on the back end of the property…that’s what I ended up having to do.”
He’s planning on keeping it under 800 square feet, following regulations, and hopes to have it done by the time he and his fiance are married. Barber also made a deal with his parents that they’ll essentially switch places once they get older. Luckily, Barber’s dad used to build homes, so he’s been helping him out with the construction process—they suspect the total cost will be around C$50,000. Barber’s great grandfather actually built the house his grandfather is living in now, and he says they basically did the same thing he’s doing now.
“To me, that’s just insane, that we’re still doing that in this day and age,” he said. “It makes me feel bad for the people [whose] families don’t own acreage, don’t own property, and can’t do this.”
Barber’s parents bought their 40 acres of land around 30 years ago for around C$40,000, he said. Things have changed, and nearly all of his friends from high school and college are feeling like home ownership is out of reach for them. In the fourth quarter of last year, despite there being a generalized dip in property values, RBC’s aggregate affordability measure for Canada rose for a ninth-straight quarter to 62.8%. That’s its worst-ever level, the bank said, adding that buyers in British Columbia and Ontario are “especially challenged.”
“We’re probably not going to be able to buy a house unless something changes,” Barber said, referring to himself and other younger people he knows that seem to have just accepted this reality.
