Young British Columbians need to save for 23 years in order to scrape together enough money for a downpayment to buy a family home, according to a new report on Vancouver real estate.
The report, titled Code Red: Rethinking Canadian Housing Policy, was published Wednesday by Generation Squeeze, a lobby group for young Canadians. It looks at the change in average home prices and earnings across Canada – including Metro Vancouver – ahead of a campaign aiming to elicit action to “ease the housing squeeze.”
“It used to take five years for a typical young Canadian to save a 20 per cent downpayment on an average home,” explained Dr. Paul Kershaw, the study’s first author and a UBC professor, in a release.
“Now it takes 12 years across the country. 15 years in Metro Toronto. 16 years in all of B.C. And 23 years in Metro Vancouver.”
The study drew on a range of statistics from BC Assessment, Statistics Canada, the BC Real Estate Association and the Canada Mortgage and Housing Corporation amongst other sources.
It found that the average price of a home with three bedrooms in Metro Vancouver exceed $800,000 and are well out of reach for most younger Canadians.
The researchers went on to examine what is available for less than $500,000 – twice the cost of an average home in the region back in 1976-1980, after inflation. They found only 15% of Metro Vancouver homes cost less than half a million dollars and have at least three bedrooms.
“This means what used to buy two entire homes when today’s aging population started out as young adults now only buys two bedrooms,” explained co-author Anita Minh. “Often, that’s not enough for a family with two children.”
The study also makes 10 suggestions for how to solve the housing crisis in Canada:
- Homes first. Investments second.
- Tax housing wealth to slow down housing price increases
- Don’t just focus on taxing the housing wealth of foreign investors or speculators
- Try to tax net housing wealth, not just gross wealth
- Recognize low interest rates cut both ways for younger generations
- Age matters. But the current treatment of age in housing policy is outdated
- Revisit zoning for single detached homes in housing hot spots like Vancouver and Toronto
- More rental accommodation
- More below-market housing, but
- Don’t let child care, parental leave, transit, etc. add second, third and fourth mortgage payments