Warning that the affordability situation has reached crisis levels, a new report by advocacy organization Generation Squeeze stated that Canadian millennials now need almost three decades to save enough money for home purchases.
“It’s an emergency… these are critical levels,” leading academic and Generation Squeeze founder Paul Kershaw told the Financial Post. “We’ve been sounding alarm bells in B.C. and across country. Affordability is a way bigger problem than we’ve been talking about.”
At current income levels, and assuming that 15% of pre-tax earnings are allocated to housing savings, today’s young adults and first-time buyers are estimated to take as much as 29 years to afford a home in Metro Vancouver.
This duration is fully eight years longer than the previous generation needed back in 1976, Generation Squeeze stated.
In the Greater Toronto Area, this demographic will need 21 years to save for a 20% down payment on an average-priced home. In Ottawa and Quebec, prospective buyers will have to run tight budget ships for 10 and 11 years, respectively.
Across Canada, millennials will need takes 13 years of full-time work to save for a home purchase.
These results dovetailed with the findings of a poll recently commissioned for CBC News. Said study found that Canadians continue to worry about finances despite the recent strength of the national economy, with 32% of respondents citing housing and living costs as their major sources of anxiety.
Other concerns were climate change (19%), health of self/family members (10%), and immigration (8%).
Manulife chief economist and head of macroeconomic strategy Frances Donald noted that these figures aren’t surprising, considering that housing affordability remains an ever-distant dream for most of Canada’s hopeful home buyers.
“So while the data, as a whole, still looks fairly solid, it’s completely understandable, even from someone who spends all day looking at numbers … why consumers and households might be feeling a little bit nervous,” Donald stated.
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