Shiva Chanana, like many 24-year-olds, lives with two other flatmates in a rented apartment.
His is close to Centennial College’s Progress Campus in Scarborough, where he’s a marketing student. (Centennial College’s journalism program publishes the Toronto Observer, where this reporter is a student)
Chanana works part-time, earns enough to pay for rent, and saves up in hopes of buying a home in Scarborough in the next ten years.
But, he’s not optimistic.
“I would love to stay in Toronto, but I don’t think I will be able to because of the shooting prices,” he said.
One in every three Canadian Gen Z wants to be a homeowner within the next five years, a Sotheby’s study shows. But, at what cost does this dream come true?
The young adults of this generation, typically those between the ages of 20 to 25, are actively seeking to buy a home sooner rather than later, yet the housing market has not been kind.
The housing crisis was one of the major focal points during the recent provincial elections, and young adults want action from the province’s leaders.
“The government should be capping (placing an upper limit) the prices, about the rent, real estate, and buying,” Chanana said.
The current housing reality
Of the 36 per cent of Gen-Z Torontonians who expect to buy a home within the next five years, 70 per cent of them are looking to afford it out of their own hard-earned savings.
However, the market has also seen one of the biggest pricing increases because of the pandemic. Scarborough, in specific, saw an average spike of 15 per cent, according to a Toronto Housing Market report.
Scarborough is home to many students and young working professionals; around 38 per cent of its population is aged 15 to 44, as per the city of Toronto census (2016).
Other related news: This ‘tiny town’ may be a solution to the housing crisis in Toronto
Teachings from COVID-19
And yet, even with the hike in home prices, real-estate agents said they saw an interesting turn of events when it came to young buyers entering the market.
“People found creative ways. Co-ownership became a thing to friends deciding to buy a house together, or even asking family for help when they might have not before,” Juliette Fergus, a Trust Realty Group agent, said in a Zoom interview.
Fergus said COVID-19 prompted young adults to push boundaries and buy homes of their own. “Through the pandemic, everyone realized the value of space and found the eventual payback of owning a home was better than constantly paying rent.”
“We saw a lot of people enter the housing market for the first time, even though the prices were unbelievable,” she added.
PCs housing plan: more houses, faster
The recent provincial elections that took place on June 2 brought many plans regarding housing to the forefront. Each party had a different approach. A press release from the Progressive Conservatives (PC) shows what they promised before winning the election:
- Housing Supply Action Plan: The plan, which was introduced in 2019, aims to build more houses much faster. The increased number of homes would then balance out market prices. Upon re-election, the PCs promised to build 1.5 million new homes in the next ten years.
- Transit-Oriented Community Program: One of the biggest concerns while looking at houses is transit proximity. With this plan in place, 500,000 new housing units are set to be built in the GTA, with easy access to subways and bus stops.
- Better contracts: Amendments to contract cancellations, extending warranties, and better regulation of builders and developers.
Zoe Knowles, the director of communications for the ministry of housing, said the recommendations from the Ontario Housing Affordability Task Force will constantly be taken into consideration as the PC party makes decisions over the next four years.
She emphasized the need for collaborative work between provincial, municipality, and industry-related partners.
“There is no ‘silver bullet’ to the housing supply crisis, and no single level of government can solve this crisis alone,” Knowles said in a statement.
On May 16, in a televised debate leading up to the election, the Ontario Liberal Party’s former leader Steven Del Duca commented that the PCs’ plans for housing were made to cater to party donors and not the people.
Chanana also wanted more specifics in government plans.
“We need more focused solutions for where we are right now,” Chanana said.
The ebb, flow, and future of housing
A recent RBC report anticipates a “cool-down” in the housing market for 2023. Interest rates from the Bank of Canada are set to increase, a step being taken to curb inflation, which might also make mortgage payments more difficult. However, the increase in rates is expected to bring down housing prices.
This situation could seem confusing to new homebuyers, with higher interest rates to pay. Students like Chanana are hoping to see more reforms from the government to help out Toronto’s growing young population.
Real-estate agents like Fergus are hoping the situation gets better and prices plateau. “It’s just so, the housing market ebbs and flows, and right now with COVID-19 waning, it is time we had a bit of a valley,” she said.