Skip to content

Mortgage 101 – the Canadian dream of homeownership | June 2021 Part 2

In this episode of Mortgage 101 with Clinton Wilkins and Todd Veinotte, as heard on News 95.7, the guys talk about the Canadian dream of homeownership, two people on mortgage applications, and family gifts to help people get into the housing market.

Mortgage 101 with Clinton Wilkins & Todd Veinotte – June 2021 – Part 2

Don’t feel like watching the video? Check out the transcript below.


Todd is on News 95.7 seven days a week!

Clinton Wilkins: [00:00:00:01] Now, people get to listen to you for hours a week, and I’m sure some people listen to every every Rick Howe Show.

Todd Veinotte: [00:00:07:02] Every Rick Howe Show, and then they can listen to us on Saturday and then again on Sunday. So it’s Todd Veinotte on News 95.7, (in unison) seven days a week!

Clinton Wilkins: [00:00:16:14] Ohhh, you know what? What a great place to be, really.

Todd Veinotte: [00:00:22:08] What a great place to be. Anyway, welcome back. And we’re chatting about, we want to talk about the Canadian dream. And this is one of your catchphrases that you use.

Clinton Wilkins: [00:00:35:12] I think it just, it speaks to me and hopefully it speaks to people who are listening to our show.

Todd Veinotte: [00:00:40:21] Yeah, homeownership.

The Canadian dream of homeownership

Clinton Wilkins: [00:00:42:25] Homeownership is part of the Canadian dream. I think, you know, when you’re growing up and in the media, they talk about the American dream a lot, like who says the Canadian dream? Like nobody says that. And that American dream was really, you know, that new Ford, Chevy, Chrysler vehicle in the yard with your white picket fence, living in your suburban neighbourhood and keeping up with the Joneses. You know what? That’s what the American dream was.

And, you know, I think probably the Canadian dream is similar, but I think that in some ways the Canadian dream is maybe, hopefully, more stable and hopefully still attainable for many, many Canadians. And I know in Halifax, typically it has been. And over the last so many months, it has been more challenging with the price increases and, you know, more demand in the marketplace.

But you know what? I think it’s still very achievable for many. And, you know, I’m happy to be a part of the process because that makes me feel good, you know?

Todd Veinotte: [00:01:49:22] Yeah, but I mean, to that, the American dream was accessible to somebody if you were in the right position to enjoy it. For many, they were left out of that. And this is becoming an issue here in this country when it comes to the Canadian dream of homeownership.

There are many people who just three, two years ago could have been part of that dream, who know who no longer can be to no fault of their own. They’ve done everything that they have been expected to do. But the sands have shifted.

Percentage of income spent on housing

Clinton Wilkins: [00:02:19:17] And maybe just the year that they were born. That’s going to be more and more challenging and things are going to right the ship, you know what I mean? Incomes are going to increase. Things are going to come back in line.

Todd Veinotte: [00:02:31:12] When is that going to happen?

Clinton Wilkins: [00:02:32:27] I think everything takes time. And, you know, at one time the percentage of a person’s income went to their home, now it’s about the same percentage. Incomes have increased over the years and right now, yes, we are seeing a spike in the home prices.

But if we think about Ontario and even let’s talk about Toronto, you need to have household income of over $200,000 to really to afford anything. And is their average income that much higher than it is here? No. No, it’s not. You know, so it’s not available. It’s available to even less people there. Where here it’s still realistic. And, you know, I think we’re going to see some urban sprawl.

Todd Veinotte: [00:03:22:22] But I want to push back a little bit here, if you would allow.

Clinton Wilkins: [00:03:25:03] You know what? I love a little devil’s advocate.

Todd Veinotte: [00:03:27:12] Little devil’s advocate here, okay? A lot of people right now in Nova Scotia, our listening audience makes $50,000 $60,000. I would bet a lot of people that’s probably the, I think, median income in this province is something like $40,000 to $50,000. But let’s say you’re even making $70,000. You are now out of the housing market if you’re a single income person, single household income person.

Which, 70 grand ain’t that bad of money, right? You need to have a pretty good job to be pulling $70,000. Yeah, a lot of civil servants would be making that, a lot of military would be in that range.

Need two people on the mortgage application and/or a gift from family

Those people cannot afford to get a down payment together and qualify for a mortgage, because the average mortgage, the average house now is 400 grand or something like that here, right? So I’m seeing just based on that, this is becoming a problem, is it not?

Clinton Wilkins: [00:04:20:05] You know what? I think that it really is the higher income earners that can afford to buy a home on their own. And that’s not for everyone. And I think more and more there’s two applicants buying a home. There’s two applicants on the mortgage, or there’s a large gift from mother, father, brother, sister.I’m seeing a lot of gifted down payments and I’m seeing gifted down payments to the tune of large sums of money.

Todd, I’m seeing gifts in excess of $20,000, $50,000, $100,000. And that is a recipe of a shift in the culture. When I started doing this 15 years ago, gifts made up a very small percentage of the down payment, honestly, like and I saw a stat the other day, like two per cent of down payments were gifted. Now, it is staggering.

Every transaction I see for first-time home buyer has a family gift or there’s two applicants or there’s two applicants and a gift from the family. And the culture is changing.

Home owners have more equity now

Todd Veinotte: [00:05:26:07] It’s a problem, isn’t it? This Canadian dream?

Clinton Wilkins: [00:05:29:13] I’ll tell you. My parents, I mean everyone’s parents, if they own a home, have benefited from these increasing property values. So guess what? The net worth of that family has now increased. And they’re either sharing a part of that net worth in terms of maybe an early inheritance or gift.

There are some parents that are mortgaging their own homes to give gifts to their kids to get into this housing market. It’s happening. And we’re going to see that more and more over time.

And, you know, at one time, there was multigenerational housing situations. I can tell you first-time home buyers today, they are not letting their parents move into their house. That’s not happening. There has been a shift and that shift is going to continue happening.

But I’m going to say we’re going to see more and more gifted down payments, especially for first-time home buyers. And I think we’re going to see a lot of first-time home buyers only buying a home if there’s two applicants.

“Through no fault of their own, unable to achieve that Canadian dream”

Todd Veinotte: [00:06:26:29] Here again, it’s back to the problem. Somebody, a young person doesn’t have that that opportunity. Perhaps they’re from a single income parent who didn’t make enough money to scrape together, student loans, university, do everything right. And they’re, to no fault of their own, unable to achieve that Canadian dream. This is becoming a problem, in my opinion.

Clinton Wilkins: [00:06:51:07] It is going to continue happening. I think that that single person without the down payment, with that single, you know, income, it is going to take them years, years, to get into the housing market.

I read a stat the other day that the average household in Ontario, without help from their family, would take 30 years to save enough money for the down payment to be able to qualify based on their average income. It is not that bad here, but it is worse than it was a year ago and it’s worse than it was two years ago.

The classic supply and demand

Will it continue getting worse, Todd? I don’t know. Because I’m not an economist, I don’t have a crystal ball, I don’t know what’s going to happen with the housing prices and the supply, but the one thing I do know in basic economics is it’s supply and demand.

Currently, there is more demand than there is supply. And unless we get more homes being built or we slow the people moving into Nova Scotia, the supply issues are going to continue. But there’s nowhere I’d rather live than in Halifax and there’s nowhere I’d rather live than in Nova Scotia.

Stay tuned for affordable housing discussions

Todd Veinotte: [00:08:02:13] Okay, I want to talk in the next segment about affordable housing. This is this is a hot button issue and how the private sector is involved in mortgage lending and all of that. Sound good?

Clinton Wilkins: [00:08:10:29] Sounds great.

Todd Veinotte: [00:08:11:17] Okay, that’s Clinton Wilkins myself, Todd Veinotte. This is Mortgage 101 Your Guide to Homeownership right here on News 95.7. As mentioned, when we come back after the break, we’re going to talk about housing supply and affordability. We’ll get to that when we come back.

If you have any questions, get in touch with us at Clinton Wilkins Mortgage Team! You can call us at (902) 482-2770 or contact us here.