Yuliya Belik had her eye on an East Vancouver one-bedroom loft-style condo with a view of a beautiful cherry blossom tree for a year. When she finally bought it last September, she was understandably nervous: Even though she loves the place, it cost her much of her savings and left her with less financial flexibility.
“I didn’t buy at the top of my budget, but the down payment was all coming from me,” Ms. Belik says. Her combined monthly mortgage, strata fees and mortgage insurance costs are nearly double what she was paying in below-market rent, but her salary comfortably covers it. Still, Ms. Belik, a 30-year-old finance professional at a clothing retailer, said she worries what would happen if she were to get hit with an emergency, like losing her job. The down payment was most of her safety net.
Ms. Belik is part of a growing share of Canadians tackling home ownership on their own. According to a survey released in July by real estate search portal Point2, 42 per cent of prospective first-time homebuyers said they were considering applying for a mortgage alone. The share of potential solo buyers was highest among respondents aged 45 to 54 at 47 per cent, 55 to 64 at 52 per cent, and over 65 at 45 per cent. It was still sizable, at 38 per cent, among those aged 18 to 34.
The trend tracks with Canada’s demographic shift: Single-person households became the predominant household type for the first time in the country’s history in 2016, and as of 2021 made up 29 per cent of all households, according to Statistics Canada, something the agency says was driven by a combination of older Canadians living alone and a growth in mid-life single-person households.
The juxtaposition is stark: With the average home price in Canada sitting at just over $649,000 in August – soaring to just under $1.1-million in Toronto and $1.25-million in Vancouver – buying on a single income is incredibly difficult for everyone except the highest earners.
Ron Butler, a Toronto-based mortgage broker with Butler Mortgage Inc., says for the first 15 years of his career he almost never worked with solo buyers. That’s since changed, which he attributes largely to young Canadians with real estate FOMO (fear of missing out).
Some people get the feeling that “I gotta do something. If I don’t get started on this ladder of owning property I will never own a place like my parents have,” Mr. Butler says. “Unfortunately for a bunch of people in their late 20s and 30s there’s no financial ability to make that move. But if it’s possible, it becomes compelling.”
That was the case for Ms. Belik, who says she wanted to start “putting money into something that will pay it forward” rather than renting.
Very few young solo buyers Mr. Butler works with are making a purchase without some parental help, and most who are buying in Toronto are limited to condos rather than townhouses or detached homes, he says. Solo buyers with incomes of around $140,000 or more and some family help could manage to land a condo-townhouse in a less central neighbourhood, he says.
The past year’s sluggish housing market across the country created a window of opportunity for first-timers who were previously on the margins of buying in hot markets, including those going it alone, says Mary Cleaver, a realtor with Stilhavn Real Estate Services in Vancouver.
Some of the solo first-time buyers Ms. Cleaver works with are in mid-life or starting to approach retirement, with good jobs, no kids and major savings, who happily rented for most of their lives but decided to buy owing to the state of the rental market.
“The rental market’s gotten so tight here that if your rent on a one-bedroom is $2,600, you’re much better off putting it on a down payment and owning those four walls. Even when you pay a lot in rent you can still be evicted for one reason or another, and they’d like to have security,” she says.
Concerns about the rental market and a desire for greater stability aren’t unique to solo buyers, but they’re a “valid part of this phenomenon,” Mr. Butler says. According to an August survey of millennial and Gen Z prospective buyers in Ontario by Royal LePage, 65 per cent desired a permanent place to live that’s their own; 62 per cent says owning a home provides stability; and 52 per cent felt renting was “restrictive” owing to tenant-landlord policies.
Buying alone doesn’t affect someone’s ability to qualify for a mortgage if they have the necessary down payment, income and credit score, Mr. Butler says. But single buyers need to be “ultra confident” in their job situation. “If you’re one person and you lose your job, you can hold it together for a while, but once the severance runs out, holy Jesus that’s hard.”
Jean Ko Din, an editor who bought a one-bedroom condo in Vaughan, Ont., in March, says that even after negotiating a $40,000 price reduction and being able to put down a 20-per-cent down payment, she still had “sleepless nights” about buying on her own.
“I was playing with the Excel sheet to say, worst case scenario, I can do it,” she says. “At the end of the day I had to give myself a pep talk to take it one step at a time, one mortgage payment at a time, and if it gets overwhelming I have options.”
People buying alone should strongly consider purchasing disability insurance to ensure they can continue paying their mortgage in the event of an injury that prevents them from working, says Mark McGrath, a certified financial planner and associate portfolio manager with PWL Capital Inc. in Squamish, B.C.
Buyers of all stripes can underestimate the cost that comes with homeownership, Mr. McGrath says, by comparing their hypothetical mortgage costs against their current rent without factoring in unexpected costs like repairs, condo special assessments and more. Those costs could hit single buyers harder.
PWL chief investment officer and portfolio manager Benjamin Felix wrote recently that homeowners can expect to spend roughly 1 per cent to 2 per cent of their property value per year on maintenance and depreciation.
