It takes Quebecers 11 years of work to save for down payment on a home

It takes Quebecers 11 years of work to save for a down payment on the average home

If you’re saving for a down payment on a home in Quebec, it’s estimated to take you more than 10 years to do so.

According to Generation Squeeze’s Straddling the Gap report for 2022, it takes 11 years of full-time work for the typical young person to save for a 20% down payment on an average home in Quebec.

The report says that’s seven more years than when today’s aging population started out as young people.

In 1976, it took Canadian full-time income earners five years to save up for a 20% down payment, the average across Canada now takes 17 years.

The report goes further to debunk the often-made claim that young people could afford homes if they stopped buying expensive lattes.

“Young people are often told they’d be able to afford to buy a home if only they stopped spending money on expensive lattes,” says Generation Squeeze. “But you’d have to give up drinking 15 lattes a day, every day, for five years, to save the 20% down payment on an average-priced home in Canada.”

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Generation Squeeze says it conducted the report because Canada is “at a housing crossroads.” The publication says there is an “urgent need” for Statistics Canada to improve the measure of housing price inflation.

The report further states that average home prices would need to fall $341,000 – half of the 2021 value – to make it affordable for a typical young person to carry a mortgage that covers 80% of the value of an average-priced home at current interest rates.

That, or you’ll have to make $108,000 a year. That’s double the amount the average Canadian makes during a year.

For potential homeowners in Quebec, the average home price would need to fall $113,000 (25% of the 2021 provincial value) to make it affordable for a typical young person to carry a mortgage that covers 80% of the value of an average-priced home at Quebec’s current interest rates.

If that’s too much number jargon, an average full-time earner in Quebec would need to increase to $70,000 per year to afford a house.

For those Quebecers locked out of home ownership, the average rent for a two-bedroom unit in the province in 2021 was $10,704/year, compared to average rents closer to $8,994/year in 1981.

Generation Squeeze

“All of us have important roles to play in restoring housing affordability, because no single action will fix our dysfunctional system,” says Generation Squeeze. “Our comprehensive housing policy solutions framework identifies all the levers we need to pull.”

Specifically, the publication said all Canadians need to call for home prices to stall or fall moderately – loudly enough for governments to hear so they can align other policies with this goal. “We especially need the voices of those who’ve reaped wealth windfalls from the same rising prices crushing affordability for many others.”

For more eye-popping house market numbers, check out the full report right here.