Trending
A red, white, and black flag with a white background.

Market conditions are increasingly hostile to millennials – analysts

A woman sitting at a table with a notebook and orange juice.

A potent cocktail of unabated real estate price increases, ever-tighter regulations, and stagnant income growth has thrust Canada’s hopeful millennial home owners into a situation that probably no previous generation had to contend with, according to market analysts.

“The fact is, there’s been a massive transformation in terms of how much more work young people have to do to get so much less,” University of British Columbia School of Population and Public Health professor Paul Kershaw told the Financial Post.

Kershaw – who also founded Generation Squeeze, a non-profit advocating for Canadian young adults’ right to home ownership – argued that even just a cursory glance at the income-to-home-price ratios of various generations will bear out his assertion that today’s millennials are bearing an unprecedented burden.

In 1976, which was when much of the baby boomers were reaching young adulthood, the average home price (adjusted for inflation) was $213,030, with the median full-time earnings for those aged 25 to 34 at $54,700 (representing a ratio of around 4-to-1).

In 2017, the average home price stood at $510,179, and medial full-time income for the same age bracket was $49,800 (ratio of nearly 10-to-1). This figure was even more drastic for the hottest markets, with Ontario seeing a 12-to-1 ratio, and Vancouver 14-to-1.

Read more:

Even the rental market is no refuge for the millennial would-be home owner, as rents have also seen similarly dramatic increases. Data from industry observer Urbanation indicated that in Toronto, the average rent went up by almost 11% in Q1 2018 alone (up to $2,206).

“The traditional situation of young people working their way up, living with mom and dad or renting until they can save up and buy, in a lot of ways, has been completely altered,” according to Jim Clayton, professor at the Brookfield Centre in Real Estate and Infrastructure at York University, Toronto. “You’ve got to be a lot more disciplined and creative and, let’s face it, there’s a lot more inter-family wealth transfer going on.”

 

Related stories: 

About the Author

Ephraim is currently a journalist at Mortgage Broker News, Real Estate Professional and Canadian Real Estate Wealth. Ephraim is a highly accomplished news reporter whose work has been published across North America and the Asia Pacific region. Before joining Key Media, Ephraim spent eight years working as a journalist with Reuters TV. His areas of expertise include real estate, mortgage, and finance. LinkedIn | Email  

Post a Comment

Related Articles

The federal government’s new Housing Plan, announced on April 12, 2024 and supported by Budget 2024, introduced a provision aimed at helping renters build credit...

Calgary offers unique advantages and untapped potential for investors seeking robust returns and long-term growth. Calgary is a vibrant urban centre, providing a balanced mix...

Most Trending News

The federal government’s new Housing Plan, announced on April 12, 2024 and supported by Budget 2024, introduced a provision aimed at helping renters build credit...

Calgary offers unique advantages and untapped potential for investors seeking robust returns and long-term growth. Calgary is a vibrant urban centre, providing a balanced mix...

Commercial and Industrial According to Altus, the commercial and industrial sectors faced setbacks in 2023 Q4. In the multi-family sector, there was a slight decrease...