If you dream of owning a home one day, this report could tell you how long you’ll have to keep dreaming until you can make it a reality. The report outlines how long the average young adult will have to save for a down payment in Ontario cities.
Canadian non-profit organization Generation Squeeze has released its housing affordability report for 2022 called “Straddling the gap,” which analyzes the gap between average earnings and home prices in cities across the country.
Specifically, the report looks at the earnings of young residents between 25 and 34 years old to see how many years of full-time work that it would take to save enough money for a 20% down payment on a home.
In the Greater Toronto Area, you may be close to retirement by the time you have enough money for a down payment.
According to the report, the average young person would need to work full time for 27 years to afford 20% for a down payment. That’s 21 more years than their parents had to save up for a house back in the day.
“Average home prices would need to fall over $750,000 – 69% of the 2021 value – to make it affordable for a typical young person to carry a mortgage that covers 80% of the value of an average-priced home at current interest rates,” the report says.
In Ottawa and Windsor, the future is not as bleak for young people, who would only need to save for 14 years for a 20% down payment.
In the Hamilton-Burlington area, young homebuyers would need to work full time for 22 years to afford their down payment, 19 years in London, and 20 years in Kitchener-Waterloo.
Although the housing market is cooling off, with Ontario expected to have the biggest price drop in the country in 2023, it still won’t be anything close to affordable for most young people.
If you need a reason to ask your boss for a raise, just show them this article.