{"id":12873,"date":"2019-06-27T10:10:53","date_gmt":"2019-06-27T17:10:53","guid":{"rendered":"http:\/\/www.roryc.ca\/blog\/?p=12873"},"modified":"2019-06-13T11:00:32","modified_gmt":"2019-06-13T18:00:32","slug":"canadian-home-prices-need-to-fall-by-223000-to-be-affordable","status":"publish","type":"post","link":"https:\/\/www.roryc.ca\/blog\/2019\/06\/canadian-home-prices-need-to-fall-by-223000-to-be-affordable\/","title":{"rendered":"Canadian Home Prices Need to Fall by $223,000 to be Affordable"},"content":{"rendered":"<p style=\"text-align: justify;\">Home prices in Canada\u2019s biggest markets have fallen from peak levels, but it\u2019s going to take a much bigger dip to put ownership within reach for the typical Millennial.<\/p>\n<p style=\"text-align: justify;\">How much bigger? According to a new study from Generation Squeeze, the average Canadian home price would need to plunge by $223,000 to be affordable for a median-earning full-time workers between the ages of 25 and 34, common bookends for the Millennial cohort.<\/p>\n<p style=\"text-align: justify;\">But far more dramatic drops would have to sweep through the country\u2019s most expensive markets for local buyers to stand a chance, the housing-affordability advocates suggest.<\/p>\n<p style=\"text-align: justify;\">In Metro Vancouver, home prices would have to plummet by $795,000 \u2014 that\u2019s more than the benchmark price of a Canadian home, which was $621,700 as of April, according to the national real estate association.<\/p>\n<p style=\"text-align: justify;\">For the Greater Toronto Area, prices would have to come down by two-thirds the current level, or a whopping $523,000. Even in relatively affordable markets in the Prairies, it would take considerable corrections. In Calgary, a price drop of $148,000 is required, versus $76,000 in Edmonton.<\/p>\n<p style=\"text-align: justify;\">To be truly affordable, a homebuyer shouldn\u2019t be spending more than 30 percent of their pre-tax income.<\/p>\n<p style=\"text-align: justify;\">So the Generation Squeeze study entitled \u201cStraddling the Gap\u201d compares current prices with what price a median-earning 25-to-34-year-old could afford without crossing this threshold.<\/p>\n<p style=\"text-align: justify;\">Analysts sourced full-time, full-year median earnings income data from Statistics Canada for that age group and assumed a downpayment of 20 percent. They also assumed a five-year fixed-rate mortgage.<\/p>\n<p style=\"text-align: justify;\">\u201cDespite recent nominal declines in housing prices compared to previous years, the gap between the cost of owning a home and the ability of younger Canadians to afford it is at critical levels,\u201d says Paul Kershaw, founder of Generation Squeeze and co-author of the report, in a news release.<\/p>\n<p style=\"text-align: justify;\">\u201cIf housing markets are levelling out, they remain untenably high,\u201d he continues.<\/p>\n<p style=\"text-align: justify;\">Generation Squeeze includes multiple recommendations to policymakers on how to address housing affordability issues plaguing major Canadian markets.<\/p>\n<p style=\"text-align: justify;\">\u201c[T]he shift toward dual earner households is a key path for many couples to straddle the much greater gap between home prices and earnings,\u201d says Kershaw in an email to Livabl. \u201cHowever, this coping strategy requires child care and parental leave to no longer cost mortgage-sized payments,\u201d he continues.<\/p>\n<p style=\"text-align: justify;\">Generation Squeeze lists reducing these costs among its affordability-improving recommendations.<\/p>\n<p style=\"text-align: justify;\">Others include policy targets that seek to keep home-price increases in line with incomes, as well as a new phase of the federal government\u2019s National Housing Strategy that widens the plan\u2019s focus beyond social housing.<\/p>\n<p style=\"text-align: justify;\">\u201cIn the lead-up to the fall election, we need all parties to commit to bold action that builds on some of the progress we\u2019ve seen emerge in the past couple of years,\u201d Kershaw says in the news release.<\/p>\n<p style=\"text-align: justify;\"><a href=\"https:\/\/www.livabl.com\/2019\/06\/canadian-home-prices-affordable-millennials.html\" target=\"_blank\" rel=\"noopener noreferrer\">Canadian Home Prices Need to Fall by $223,000 to be Affordable for Millennials<\/a> by Josh Sherman | Livabl<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Home prices in Canada\u2019s biggest markets have fallen from peak levels, but it\u2019s going to take a much bigger dip to put ownership within reach for the typical Millennial. How &hellip; [<a href=\"https:\/\/www.roryc.ca\/blog\/2019\/06\/canadian-home-prices-need-to-fall-by-223000-to-be-affordable\/\">read more<\/a>]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8],"tags":[],"class_list":["post-12873","post","type-post","status-publish","format-standard","hentry","category-market-updates"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Canadian Home Prices Need to Fall by $223,000 to be Affordable &#8226; Rory C Real Estate | Oakwyn Realty<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.roryc.ca\/blog\/2019\/06\/canadian-home-prices-need-to-fall-by-223000-to-be-affordable\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Canadian Home Prices Need to Fall by $223,000 to be Affordable &#8226; Rory C Real Estate | Oakwyn Realty\" \/>\n<meta name=\"twitter:description\" content=\"Home prices in Canada\u2019s biggest markets have fallen from peak levels, but it\u2019s going to take a much bigger dip to put ownership within reach for the typical Millennial. 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