Nearly 8 years of work needed to pay for a home – analyst
Discussions of Canada’s long-running home affordability issue usually focus on the staggering price growths, but a recent analysis offered a different perspective that underscored the reality of just how hard it is for this generation’s would-be buyer to manage the costs involved.
In a Broadbent Institute analysis published by CBC News, policy fellow Marc Lavoie said that as of 2015, the average price of housing in Canada is equivalent to more than 400 weeks’ worth of earnings.
“This is nearly eight years’ worth of labour time and about an extra 100 weeks compared to the 1989 peak. Clearly, at cash cost, young Canadians who wish to own their dwelling are much worse off than were their parents when they bought their house in the 1970s or during the first half of the 1980s,” Lavoie said.
Statistics Canada data was used to determine the weekly earnings of the present-day workforce, a sector already burdened with an erratic loonie and a petro-economy still reeling from the global oil shock.
“Current and recent buyers need to devote many more weeks of labour time to the financing of their home than their predecessors,” Lavoie explained.
The analyst pointed at this crushing set of obligations as the chief factor breeding ennui among millennials and young families.
“No wonder so many young prospective buyers, especially those in major cities, feel that owning a residential unit is more like a long-distance dream,” Lavoie said.