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June 14, 2019 - 7:00 AM
KELOWNA - Dramatic changes are needed for young people to attain home ownership dreams that were so readily achievable by their parents and grandparents, says Generation Squeeze, Canadian, non-partisan, non-profit organization that advocates on behalf of young adults.
A new study by the Vancouver based organization says, for example, average home prices would need to fall $239,000 – about half of the current value – to make it affordable for a typical young person between the ages of the ages of 25 and 34 to manage an 80 per cent mortgage at current interest rates.
Or typical full-time earnings would need to increase to $100,600/year – nearly double current levels. Based on the last decade, actual earnings are expected to be flat.
“It takes a typical person, between 25 and 34 years of age, 13 years of full-time work to save a 20 per cent down payment on an average priced home, nine more years than when today’s aging population started out as young people,” the report states.
The time it takes to save for a downpayment jumps to a whopping 29 years in Vancouver.
The picture is brighter in Kamloops where it would take 10 years. Wages would have to rise to about $75,000, or about 33% or housing prices would have to drop by around $100,000 or 25 per cent.
The report is called: Straddling the Gap: A Troubling Portrait of Home Prices, Earnings and Affordability for Younger Canadians.
It calls for changes such as lower daycare and student loan costs, a new national housing strategy, more purpose built rental housing and more social housing as some of the tools that can be put in place to change this picture.
It was written by Sutton Eaves, co-executive director of Generation Squeeze and Dr. Paul Kershaw from the UBC School of Population and Public Health.
Generation Squeeze, on its website, bills itself as “a national research, education and advocacy organization for Canadians in their 20s, 30s and 40s."
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