According to the Toronto Real Estate Board, between 2001 and 2025 the average house price soared from $253,658 to $1,067,861.Carlos Osorio/Reuters
The dream of home ownership has been out of reach for many people in this country for some time. With average detached home prices in Toronto and Vancouver parked above $1-million, that traditional milestone of adulthood is about as reachable for most Gen Zs as the far side of the moon.
Young adults have been sold a story that owning a home is the only path to building wealth, because that’s what our parents did. But my wife Kristy Shen and I discovered that it’s very possible to become rich as a renter.
As early adopters of the financial independence, retire early (FIRE) movement, we refused the pressure to buy, instead deciding to rent and invest our money in the stock market. Our parents thought this was a crazy risk, but we proved them wrong: Our approach made us millionaires by our 30s, and allowed us to retire decades earlier than they did.
This strategy worked for us, and it will work for the next generation. Here’s why.
Do we really expect young Canadians to wait until 2060 for affordable housing?
Stocks have historically been a better way to build wealth over time than residential real estate, even in an inflated housing market such as Toronto’s. According to the Toronto Real Estate Board, between 2001 and 2025 the average house price soared from $253,658 to $1,067,861, a massive increase of 321 per cent, or 6.2 per cent a year.
In that same period, the TSX rose by a similar 312 per cent, or 6.1 per cent a year. And that’s just Canada. The U.S. stock market returned 825 per cent, or 9.7 per cent a year. And the international stock market index, which covers Europe, Australasia, and the Far East (also known as the EAFE), returned 365 per cent or 6.6 per cent a year.
A globally diversified portfolio that combines all three indexes in equal weightings would have returned 501 per cent, or 7.8 per cent a year, handily beating the Toronto real estate market over the same time period.
But it’s not just raw performance that puts stock markets ahead. Stocks, mutual funds and ETFs all have one huge advantage over houses: affordability.
When a stock goes up in price too much, the company has the ability to lower the price of each share by increasing the number of outstanding shares on the market. For example, a share that costs $100 can be lowered to $50 by doubling the number that are available. This is called a stock split.
Why would a company do this? Because it benefits them to make their shares more affordable to more investors. More investors mean more buyer interest, and more buyers often means more growth.
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This is not true with houses. Houses can’t be bought or sold on a fractional basis: it’s all or nothing. An unaffordable million-dollar house cannot divide into four houses worth $250,000. If it could, we wouldn’t have a housing crisis.
And finally, owning stocks does not require you to take on debt. Buying a house with cash is something only the very wealthy can afford. The rest of us need a mortgage.
And most mortgages in Canada have one thing in common: They require you to be gainfully employed for the next 25 years. Minimum.
A job lasting 25 years was a normal thing for the boomer generation. For them, job stability was much more common, so a mortgage made total sense.
But for Gen Z, securing a steady full-time job seems more like a minor miracle. Layoffs happen frequently. And now, artificial intelligence is making entire industries obsolete overnight. There’s no such thing as job stability any more. And yet the rules of mortgages haven’t changed to reflect this new reality.
This couple wanted a large yard for family gatherings – and their pet rabbit. What did $650,000 get them?
That being said, home ownership does have one big advantage: It’s a forced savings plan. Paying your mortgage every month builds equity in your home. If you rent, the onus of investing your money falls on you. If that money gets squandered, you won’t get ahead.
So while the dream of early retirement is still possible without owning a home, you do have to be more disciplined in managing your own money.
Millennials created the FIRE movement to build income stability in an environment where the traditional employment-based system was failing us. And as that system gets worse over time, FIRE will transition from a fringe movement to becoming the only real option for the next generation.
Kristy Shen and Bryce Leung retired in their 30s and are the bestselling authors of Quit Like a Millionaire and Parent Like a Millionaire (Without Being One).
