Young people need to give up 26 lattes every day for five years to afford a Vancouver home

A typical young person (25 to 34) in Metro Vancouver would need to save up for 27 years for a 20% down payment on a home in the region, as highlighted by a new report on affordable housing.

That data comes from Generation Squeeze as part of a new report on Canadian real estate celebrating stalling home prices, suggesting it’s the only way young people can afford a home.

The report reveals some startling figures including how long it would take to save for a down payment, how far home prices would need to fall, and how much wages would have to increase for young people to afford a home based on average prices in Metro Vancouver today.

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Generation Squeeze points to advice young people often get that goes something like, “maybe you should save your money instead of spending it on expensive lattes.”

The group crunched the numbers, and young Metro Vancouverites would have to give up 26 lattes a day, every day, for five years to save the 20% down payment on an average-priced home in the region (compared to 19 lattes in the GTA).

Over the past several months, home prices across Metro Vancouver have been steadily falling. Still, they haven’t fallen nearly enough to be affordable for young people, according to Generation Squeeze.

The report suggests Metro Vancouver home prices would have to fall by $814,000 to be affordable for young people. Looking at it through the provincial lens, BC home prices would need to fall by $567,000.

When it comes to earnings, younger Vancouverites would need to be making around $186,000 per year — more than triple current levels — to afford a home in Vancouver today.

Generation Squeeze also looked at rental rates, saying that the average two-bedroom unit in Vancouver reached $21,888 per year versus around $12,392 per year back in 1981.

Generation Squeeze

Investors would likely shake their fists at the Generation Squeeze report, which says that the “primary goal for home prices should be that they stall for many years ahead — or even continue to fall moderately.”

For those who were successful in getting into the market, Generation Squeeze says they’ll now carry large mortgage debts.

According to recent Canadian Real Estate Association data, home prices have only fallen back to 2021 levels, which Generation Squeeze looks at as a “minor shift.”

Generation Squeeze also puts the spotlight on StatsCan, suggesting that the Government of Canada data doesn’t adequately account for the rising cost of housing.

“In 2021, inflation rose less than 4% while average housing prices increased by 21%. We need our inflation data to stop camouflaging how the primary cost of living – housing – is being driven up.”

“Our next steps can challenge a housing system that pits aspiring (often younger) home owners against those who’ve gained wealth windfalls, thanks to the good fortune of buying a home decades ago. Or we can prop up our dysfunctional system by continuing to rely on flawed inflation data, and protecting the home ownership tax shelter.”