We don't have the details, they might have a lot down. They may have actually 3-5 incomes buying that house. It's not that uncommon for certain communities to have the kids live the parents even after they marry and making a bigger house was to give space to multiple households. If it's the parents working and the seemingly adult kids as well, that would allow them to get that original pre approval.

You're making assumptions with no information.

30 years ago my parents bought a house which seemed out of their price range because they made only a bit over min wage. but they had 40% down, they worked insane hours, and had a insanely painfully frugal lifestyle. They paid off a 25 year amort in 10. Benchmarks for the Canadian average can be off when some people are willing to tolerate insane grind and frugality to get their family ahead.