I’m a millennial with a good income. In Toronto’s housing market all I can afford is a parking space or storage locker

I spend a lot of time scrolling through real estate listings and fantasizing. The criteria are modest: More than one bedroom with ample sunlight, ideally more than 500-square-feet and, critically, to purchase, not to rent.

Rarely do I consider actually buying a home myself. This piece is going to touch on a topic that most young adults already know well: entering the housing market - especially in a time where sellers have the upper hand and bids often need to be accompanied by a cover letter pleading they consider your offer - is nearly impossible.

With so many stories covering Ontario's red-hot housing market, I wanted to know what my chances at home ownership are as an adult under 30 with a good income who already lives on their own in the city. Last week, I contacted mortgage broker Dashna Joya of True North Mortgages to see what my options are.

Over a Zoom video conference, Joya went over my income, rental payments and debts. As a general rule, housing costs shouldn't exceed 39 per cent of your monthly income, Joya explained. Debts, meanwhile, need to fall under 44 per cent.

Then there's the new homebuyer stress test, which assumes a monthly mortgage interest rate much higher than the usual average. As of Tuesday, that's 5.25 per cent or the contract rate plus two per cent, whichever is greater. This, Joya said, is meant to ensure that buyers would be able to continue paying their mortgage if rates climb above current levels.

While I watch over Zoom, she punches what she knows about me into a web form that looks for an affordable sweet spot between my finances and a mortgage payment.

You're probably going to laugh," she said, telling me I may be able to obtain approval for around $150,000 - a mere 23 per cent of the average cost of a condo in Toronto's market, according to the Toronto Real Estate Board's April 2021 condo report.

You might get a garage."

I can barely even find a garage.

Within Toronto city limits, 21 listings appear on realtor.ca for my $150,000 approval. Several are listed at $1, a marketing tactic that aims to start bidding wars and solicit offers on properties. I assume that if I have to ask what the true value is, I can't afford it.

Removing the $1 listings, eight others remain - and each of them is a parking space or storage locker. They range in price from $5,500 to $45,000. While they fall into my price range, the options lack one thing high on my list of criteria: walls.

Clearly, my search radius needs to expand out of the city if I want affordable housing - and buying out of town is a step many in Toronto are already taking.

In the GTA, listings for plots of land again appear for $1. Every so often, something jumps out between $50,000 and $100,000. Each time, I find another plot of land, sometimes with the caveat that the land is not yet attached to the town's sewage system.

In Hamilton, I finally stumble upon a bachelor apartment in my price range. It is the only listing in the GTA that addresses my need for walls.

Zooming out even further, I begin looking outside the GTA. In cottage country, I find trailers advertised as vacation homes and, in several cases, options to buy into a time-share for a few weeks of the year.

Only once I expand my search radius to encompass both eastern and southwestern Ontario do I find homes that fall into my price range. By that time, I'm looking at a three to four hour commute to Toronto in good traffic.

In some cases I find homes that look good on the surface, but a click through the photos reveals a home gutted and in need of a top-to-bottom renovation.

If I'm willing to leave Ontario completely, I can find affordable homes in every other province - but all of these scenarios avoid addressing the likelihood that remote working eventually ends, meaning I need a way to get to the Star's office in downtown Toronto. Clearly, a $150,000 mortgage is not going to cut it if I want to stay close to work.

In a second version of this test, Joya makes a bold assumption: that I have $25,000 available for a down payment. This brings my mortgage up to $320,000, an amount that finally offers a few options of apartments in Scarborough and the city's northwest corner.

The reality is a down payment of $25,000 is, for me, a pipe dream. I have a modest savings account, but rent alone eats up nearly 50 per cent of my monthly income, making saving a difficult task on top of other necessary expenses. Even if I proceed with my $150,000 approval, there would be no money left to purchase furniture for my new place, let alone a car if I needed one. Effectively, buying a home right now would render me house poor.

The term house poor" was popularized in 2016 when people were pushing themselves to the limit" and depleting their savings, Joya explained. The problem buying a home for me, she continues, is I may be considered high risk since I'd have no leftover money to fall back on.

In both scenarios of this test, my monthly mortgage payment would work out to less than my current rent payments. There is no regulation in the rental market that takes affordability into the equation, Joya pointed out.

All the stress test is doing is, basically, kicking out a bunch of people (from) the housing market," she said. They have no chance to get into the housing market because of these really strict qualifying rules."

For many of Joya's first-time homebuyers, entering the market meant pushing themselves to the maximum limit they could afford, she said. The stress test increase may be pushing people out of the market, meaning they'll either need to earn more or save for longer in order to hit affordability margins.

Meanwhile, those with means to afford property in this red-hot market are not impacted by the stress test increase at all," Joya said. I think that what this is doing is creating the divide for the haves' and the have nots.' "

Jenna Moon is a breaking news reporter for the Star and is based in Toronto. Follow her on Twitter: @_jennamoon