Since September, Daryl Dominic of Sudbury has said he has lost six offers for small houses in the area.
Dominic is a first-time home buyer and even with a good job, he said, it was difficult to find a home in his price range of an income.
“It’s as if I have no complaints about my salary, and yet I still feel that even buying a basic primary home is simply not viable,” he said.
Dominic has experience in engineering and works as a product manager for Ionic Mechatronics in Sudbury.
He said he was looking for a small property in remote areas, such as Lively, Ont. or Chelmsford, Ont., with enough space for his dog to run around a yard.
It still seems that even buying a basic home is simply not viable. “Daryl Dominic, first-time home buyer.”
Closest to buying his first home was an offer of $ 250,000 for a 600-square-foot home in Lively, Ont. The property was listed for $ 199,000 and sold for $ 271,000.
“I think of people in my age group who have houses, I think half of them have a home that used to be their grandparents,” said Dominic, 29.
“And this is not to criticize him at all. It’s obviously an ideal scenario, but it just means that for those who have bought a home through the traditional process, I think I can only think of two in my head, maybe three. “
Dominic said being a first-time home buyer has put him at a disadvantage when he has to compete with property investors or people who can use other homes.
Daryl Dominic of Greater Sudbury says he is looking for a small starting home that can accommodate him and his dog. He has been bid six times so far. (Submitted by Daryl Dominic)
“It’s just not on the same level of existence as someone trying to buy their first home or someone trying to look for income (property),” he said.
While home buyers can withdraw funds from their registered retirement savings plan for the first time, Dominic said, much of his retirement savings are in a closed retirement account that he will not have access to until he turns 65.
“So one thing I’d like to see is maybe a little more leniency about how that incentive can be used,” he said.
Amanda Pride, also from Greater Sudbury, has been actively looking for her first home for two years.
“I entered the market at the worst possible moment,” she said.
Lack of single income
Pride said she had been with the same company for 15 years, but because she was on the same income, she surpassed any house offer she had ever made.
Like Dominic, Pride said she was on a hunt for a smaller home to accommodate her and her dog.
She said she was looking at homes listed in the $ 180,000 to $ 250,000 range. But at that price range, she said a house might need $ 30,000 to renovate and she would still have to offer well above asking price. to be considered.
Pride said her only income put her at a disadvantage when she applied for housing and received mortgage approval.
“I’m not married, so I don’t have a second income,” she said. “Since I’m not married, I have to rent for the rest of my life? That’s ridiculous.”
Tanya VandenBerg is chairman of the Sudbury real estate board. She says the shortage of supplies has led to high house prices in the region. (Submitted by Tanya VandenBerg)
“Unprecedented for our region”
Tanya VandenBurg, chairman of the real estate board in Sudbury, said the listed prices for single homes in Greater Sudbury had increased by 37 percent from March 2021 to March 2022.
“This is unprecedented for our region,” she said.
In a typical year, the prices of single-family homes would increase by four to five percent, Vandenberg said.
One of the reasons for the sharp increase, she said, was a shortage of supplies. The region saw a 20 percent drop in listings from one year to the next. And the average price for a detached house in Greater Sudbury reached $ 500,000.
The higher cost of the loan will mean that there will be reduced capacity to participate in some of the bidding wars. – Tad Mangwenwende, senior analyst at CMHC
VandenBerg said the increased supply of housing will have the biggest impact on prices, but the added upcoming increase in mortgage rates due to recent interest rate increases could also slow demand and help stabilize prices.
In its latest Housing market forecastpublished on Thursday, the Canadian Mortgage and Housing Corporation (CMHC) said housing prices would continue to rise across the country over the next few years, but that price growth should slow in 2023-2024.
Delay in price increases
Tad Mangwenwende, a senior analyst at CMHC who focuses on Greater Sudbury, said higher interest rates would help slow the rise in house prices.
“The higher cost of the loan will mean that there will be reduced capacity to participate in some of the bidding wars that you would see highlighted in all the news these days,” he said.
But despite possible relief from rapidly escalating house prices, Mangwengwende said it would continue to be difficult for home buyers to compete for the first time.
He said first-time home buyers who want to buy cheaper housing must compete with retired buyers, who are declining after selling their homes at a profit.
In northern Ontario, they may have to compete with people who have sold their homes in more expensive markets and will have income after the purchase.
“Some people will take it as a sign to stay in the rental market, but how it will develop is certainly difficult to say,” Mangwengwende said.
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