They're going to be quite house poor if they go for something so expensive.  It will take all their current savings and the parents' contribution, while condemning them to repaying the RRSP and 25 years of mortgage payments.
IMHO better to find something more modest or keep renting for a little while to evaluate how the market is affected by OSFI stress rules.
How will they manage in the event that Vern's contract isn't renewed?