The increasingly narrow path to owning a house, without becoming house poor
CBC
Like many Calgarians, Joss Engen was looking for a bigger house for his growing family and finding few options within their budget.
They started looking in the $350,000 to $400,000 range. That was four years ago.
They did put in offers on four homes, he said, only to find they'd been outbid by people bringing all-cash offers, waiving conditions or offering as much as $50,000 over the asking price.
"It's kind of a dog-eat-dog world," he said.
After years of looking and saving, they were able increase their budget to the $450,000 to $500,000 range, and started to find more options that met their needs. But that's also when interest rates started to rise.
Ultimately, they bought a house in the deep southeast community of Cranston, where they moved in just last week. It's a bit further afield than the condo they used to rent near Mount Royal University and — at $521,000 and a 4.89-per-cent interest rate — a fair bit more than they were initially hoping to spend.
But they made a conscious decision to adjust their lifestyle in order to afford their new home.
"We basically have to cut all discretionary — well, not all discretionary — but basically all discretionary spending," he said.
For them, it's worth it to give their kids, aged 3 and 5, a larger home with a yard. They had also looked at renting a house but found the asking prices for rent to be even higher than what they figured their monthly costs would be for purchasing a similar home.
More and more Calgarians are finding themselves in similar situations as rents, house prices and interest rates all increase at the same time, while the number of available homes shrinks.
The reality of finding a place to live in the city has changed so much, so quickly, that people who haven't been actively looking might not recognize what it's like these days.
It's a issue across the country, says Ron Butler, a longtime mortgage broker who's based in Toronto but watches trends in the real-estate market nationally.
Today, he doesn't mince words — using terms like "crisis" and "calamity" — when it comes to the situation prospective homebuyers are facing, especially in cities like Toronto and Vancouver but, increasingly, Calgary as well.
"We have this rapid rise in interest rates and we have crazy house prices," he said.