13 June 2019

It turns out that home prices would need to go down by $223,000 or about half of today’s cost in order for Canadians aged 25-34 to afford an 80% mortgage. Another variant is for typical full-time earnings for this age group to go up to $93,400/year (almost twice larger than today).

“Although we’ve seen nominal prices declines recently from previous years, the gap between the cost of homeownership and the ability of younger Canadians to afford it is critical,” – noted Dr. Paul Kershaw, founder of generation Squeeze and the report’s author.

The report shows the housing affordability gap for younger Canadians is the largest in Vancouver and Toronto, where the prices are four and three times higher than an average younger buyer can afford.

For instance, in Toronto, the average home prices would have to go down by almost 50% in order for a typical person of this age group to afford an 80% mortgage. Another variant is for the income to double. It means today, homeownership is unaffordable for young Canadians and newcomers.