Another study into Vancouver’s housing market has underlined the difficulty young people face in purchasing their first home.
It now takes 23 years for a person in Metro Vancouver to save for a 20 per cent down payment on a home, up from 5.9 years from 1976 to 1980, according to a new report by Generation Squeeze.
The report, authored by UBC professor Dr. Paul Kershaw and master’s student Anita Minh, bases itsfindings on a person in Metro Vancouver making an average full-time wage ($47,178), and saving 15 per cent for year for an average home (which currently costs $812,653).
In comparison, it takes 15.2 years to afford a down payment in Metro Toronto, 14.6 years in the rest of B.C., and 11.7 years nationwide.
“When housing has become so expensive in B.C…the reality is younger adults in this generation are going to have to be proud as being renters for much of their lives, if not their entire lives,” says Kershaw.
WATCH: Paul Kershaw authored the study and explains the new reality for potential homeowners.
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“Imagine you dream to say I’m only going to try to cobble half a million dollars – which is really is a herculean thing to do in many ways, because half a million dollars would have bought you two entire homes a generation ago – and what we’re finding is in all of Metro Vancouver, half a million dollars barely buys two bedrooms. That is a challenge, thinking about the sustainability of the region, in terms of where do we find place for people to raise families? A lot of people are joking about how they’re raising their children in their closets.”
Kershaw says that while many people compromise by purchasing homes in the suburbs, it can mean up to $200,000 in extra commuting costs over a 25-year period if they work in Vancouver.
“Here’s the reality: you can go to Pitt Meadows and Maple Ridge and Langley and Delta, and you’re still going to be finding very little that costs under 500,000 and provides you more than two bedrooms, and on top of that, you’re going to be commuting hours more a week than people used to do.
WATCH: A recent panel at UBC looked at the correlation between having affordable housing and a high quality of life. Peter Ladner from the SFU Centre for sustainable community development weighs in on the possible future of the city.
Kershaw, whose work has focused on intergenerational equity, says governments need to tax housing wealth and start treating residences as “homes first, investments second.”
“The sirens need to be blaring on fire trucks and police cars and in hospital wards, so realize that housing isn’t unaffordable in few neighbourhoods in Point Grey, Vancouver: it’s a provincial problem.”