The home stretch; first-time home buyers have few options in Kawartha Lakes

As a prospective first-time home buyer, Adam Rafton isn’t exactly asking for a lot. He and his partner would like a one-to-two-bedroom home that “hopefully has a garage,” located somewhere rural, preferably east of Lindsay toward the Omemee area.

The 25-year-old is working full time in Minden and has a stable, respected job. His partner is a teacher and now has a long-term occasional position with the Kawartha Pine Ridge District School Board, a position she can eventually build a full-time career on. Moving a bit east just makes sense for her job — and Minden is “up north” regardless, as Rafton points out.

They’ve already been pre-approved for a $375,000 mortgage.

When the pandemic struck, the couple saw an opportunity, assuming the market would cool down. They saw a house in May listed for $350,000 and jumped at the chance.

“It seemed to be one of those houses where maybe you could offer a bit less, too” Rafton said, suggesting the price may been have been a bit inflated. Their bid came in a little over asking price though, just to be sure.

In the end, the home sold for about $30,000 more than what it was listed for.

“I thought the pandemic would help us,” Rafton said. “But it just hasn’t worked out.”

Even the worst economic crisis in a century has not tamped down real estate prices in much of Canada (other than for big city condominiums), and locally there’s no signs of that ending.

Part of the reality for Kawartha Lakes is that it’s so well-positioned for future growth spurred by an influx of residents from the Greater Toronto Area, according to Lindsay-based realtor Cindy Ray. As older Canadians look to sell off their Toronto-area homes and move somewhere more peaceful, our home prices look like a bargain.

During the 2008 financial crisis, for instance, Ray says Kawartha Lakes “didn’t really have a drop in prices. They stayed stable and slowly over time the prices increased.”

“It’s putting the young area residents at a disadvantage,” says Ray, who has been a realtor for 15 years. “They are not able to compete with the prices the properties are selling for. They are having to go further north in order to purchase what they qualify for.”

Mario Mazziotti, community general manager at CIBC in Lindsay, says first-time home buyers are definitely waiting longer these days to try and qualify for a home.

“We are seeing this because of the stress test, which requires banks to check that a borrower can still make their payment at a rate that’s higher than they would actually have to pay. This helps mitigate risk for buyers should interest rates rise.

Clients are needing to have better-paying jobs and the price of housing is so high,” he says. “First-time home buyers are (often) looking at $400,000 for a first home.

Mazziotti says things slowed down in April at the height of the pandemic but “by the end of May to now it is a massive boom.”

“We are seeing bidding wars, low interest rates, with rentals being hard to find.”

All of this pushes many prospective first-time home buyers out of the running in the local area, where wages are below the provincial median.

And it’s not just Lindsay where the bidding wars are going on or where the action is.

Trish Todd, a Lindsay-based realtor who works with clients in many locales, says “we are seeing the prices jump and bidding wars not only in Lindsay (but also all of) Kawartha Lakes, Peterborough and cottage waterfront properties.”

“We are seeing a lot of GTA buyers escaping the city and acquiring our properties,” Todd says.

Brad Bird has been a Kawartha Lakes realtor for more than 33 years. When he first started in the business the majority of the buyers and sellers “were mostly local, and our biggest employer for this area was GM.”

That has changed a lot, he says, pointing out that the biggest employers now are the city, along with the Central East Correctional Centre and the hospital.

He agrees that the biggest pattern change is that “most of our buyers are coming from the GTA and retirees.”

“In the last 10 years there have been more new homes built than in the previous 25 years,” he says.

Bird maintains that owning a home is still “the best long-term investment you will ever own, both personally and economically. History has proven that.”

Kate Dorotheou is 29 and works full time at Kawartha Lakes Food Source where she earns a living wage.

However, the state of the local home buyer’s market has meant she has had to move back in with her parents so that she can save up to buy a home.

“I felt that paying rent each month was only a drain on my finances when I could be saving instead. I would rather pay my own mortgage than someone else’s,” she says.

Dorotheou says the current price of real estate in Kawartha Lakes “is a huge reason why I do not yet have my own home.”

“A small home in Lindsay — a starter home for people my age — is ridiculously priced, and those that are reasonable only stay on the market for a few days with high chances of bidding wars driving the prices out of my reach.”

Dorotheou has had her “stable full-time job” for about a year and a half, as well as a part-time job.

“The fact that I still cannot find a home even with that is incredibly frustrating.”

“The deck is definitely stacked against single people trying to buy on their own,” she says. “It could be that I need to pool resources with my younger brother to make it a possibility for both of us.”

Dorotheou has heard so many great stories about first-time ownership from her parents, but it’s just not an experience she has been able to share in. “It’s just too bad that people my age and younger are facing this struggle.”

Mazziotti doesn’t see the fired-up Kawartha Lakes housing market cooling down any time soon.

“I think it will stay hot,” he says. “More and more people are working from home and they do not need to be living in the GTA.”

He recently met a couple that moved up here from Scarborough.

“They love the area and the (cheaper) costs so much that they are talking to their neighbours from the city to move up here too.”