When Sara McNeil was 24 years old, she went to Scotland on a solo trip. She met up with a friend that lived there one night, and they had drinks at a pub, where McNeil met her now-husband. Almost 20 years later, they’re living in a small apartment in London, a city in Ontario, Canada, with their 7-year-old daughter and cat—and they don’t think they’ll ever afford to buy their own home, saying that it’s “out of our realm of possibility.”
McNeil is a high school English teacher, and her husband, Scott Hooks, works in the accounting department for a wellness and fitness services company, after emigrating from Scotland. McNeil was sort of bouncing around from school to school until she got a permanent position last year, so she wasn’t making much money until then. But her salary was C$75,000 ($55,593) last year, and together, their household income was roughly C$150,000, she says, which converts to roughly $111,187. That’s above the median family income in Ontario per Statista, which puts its most recent figure at C$97,850 ($72,481). McNeil said it herself, that it’s good money.
“If I had been making the money I’m making now, four years ago, I could have bought a house,” McNeil told Fortune. “But we just weren’t there, and by the time we got there the goal post moved.”
And, it sort of has, given that home prices across Ontario have gone up 3.1% in the past year, according to the Canadian Real Estate Association. In the same period of time, home prices across Canada jumped 6.7%. That’s not taking into account the substantial increase following the onset of the pandemic. From March 2020 to June of 2023, on a seasonally adjusted basis, Canadian home prices have gone from C$529,578 ($392,546) to C$709,103 ($525,618). That’s close to a 34% increase in a little over three years. Then there’s Ontario, which in the same period, saw home prices jump from C$649,711 ($481,594) to C$909,991 ($674,525)—a 40% increase. If that all sounds similar, it’s because it is, given that home prices rose over 40% in the U.S., on a national level, during the pandemic.
Home prices across Canada, and specifically Ontario, are below their pandemic era-fueled peaks (despite experiencing gains over the past year), as the Bank of Canada raises interest rates. Although, as the Royal Bank of Canada recently put it, the central bank’s quantitative tightening and the easing of ownership costs that followed, amid its short-lived pause and decline in home price, “barely makes a dent in reversing the enormous loss of affordability since mid-2020.” That all means that Canada’s housing market is still severely unaffordable for some.
McNeil and her partner pay around C$1,000 ($741) a month for their two bedroom, 900-square-foot, apartment. She says “it’s a little tight,” but if they moved, their rent would likely double because they’re essentially living in a rent controlled apartment. “We can’t leave…we’re doing okay in this apartment, but anywhere else we go, we’re struggling,” she said. Still, they feel like they can’t buy a home, or better said, a home that fits their needs and expectations, with prices and interest rates being where they are.
Canada’s housing market isn’t unlike ours, it’s actually quite similar in more ways than one with home prices that went up a substantial amount during the pandemic, low levels of supply, and generally a seasonal surge in demand in the spring. But, the 30-year fixed mortgage, the most common home loan in the U.S., isn’t really a thing in Canada. According to the Bank of Canada, most mortgage loans are renegotiated every five years, but they can be as short as six months or as long as 10 years. The more often you negotiate, the more often you face that risk of a new interest rate, which could be a lot higher than your previous one. “If you are more comfortable with having your rate fixed for as long as possible, prepare to pay a premium for that peace of mind,” an explainer on the bank’s website read. A friend of McNeil’s monthly mortgage payment doubled, she says, but aside from that there’s still more at play that’s keeping her and her partner from feeling like they can afford a home.
“We don’t even have a down payment because we haven’t been able to save one,” McNeil said. “Even if we wanted to buy something that’s kind of crappy and falling apart, we’d still need that downpayment…what savings we have now would be okay for something that’s maybe C$250,000 [$185,311] but definitely not something that’s C$800,000 [$592,995]. We don’t have that.”
It’s quite a thing when people wish the housing market would crash, and McNeil isn’t alone in hoping for as much. But to her dismay, it just hasn’t happened. Instead, prices continue to rise, and that could be attributed to the stronger spring season, which will become clear soon as we head into the typically slower months.
By her 40th birthday, McNeil paid off all her student loans, so they have no debt. She says on paper, they look great, but that’s not their reality, given that buying a home feels so out of reach that she calls it a “pipe dream.” Her parents bought a five bedroom house in a town outside of London, Ontario, back in 1992, for C$170,000 ($126,011). Her mother was the sole earner and made around C$40,000 ($29,650). a year. Her parents sold their home for C$300,000 ($222,373) about five years ago. Now, it’s valued at around C$900,000 ($667,119), she says.
“At the time, we desperately wanted to buy that house because I loved that house, it was my childhood home, and if I could have bought it, I would have,” McNeil said. “At that point, we did not have the C$300,000 [$222,373] that we would need. And now I could buy it, but it would be C$900,000 [$667,119].”
There’s not much space in their apartment. Her husband doesn’t want to get a dog because of that—although she tells him they might as well get one since she thinks they’ll never have a house with a yard. McNeil says her daughter won’t ever get to paint her room.
“I feel like we’ve done something wrong, like I’m not an adult yet because that seems to be the milestone that is necessary for adulthood, and we haven’t reached it and probably won’t,” McNeil said. “I feel like I’m constantly grasping for something that’s not going to make itself.”
For the most part, they’ve given up on buying a home, aside from a little voice in her head that’s still saying “maybe one day.” The money they’re saving will likely go to their daughter’s college fund, something her parents couldn’t do for her because they had four kids and a mortgage. “Looking back at what our parents had, [it feels] like something happened, something went wrong. I did everything right. I did all the steps,” McNeil said.
