MONTREAL ― As Canada’s major political parties work to outdo each other on policies aimed to help homebuyers struggling with house prices, a new survey from real estate site Zoocasa shows just how large a problem affordability has become ― at least in some places.
They put together a chart comparing 15 Canadian cities on how long it would take a median-earning household to save for a down payment for a typically-priced house.
In six of those markets, a household earning the median income ― meaning half of households earn more, half earn less ― would be able to afford a benchmark-priced house after one year of savings, assuming they save 20 per cent of their income.
Those cities would be Calgary, Edmonton, Halifax-Dartmouth, Regina, Saskatoon and Winnipeg. In Ottawa, it would take three years to save for a down payment.
At the other end of the spectrum is Vancouver, where the median household income doesn’t come close to qualifying for a mortgage on a benchmark home.
(A “benchmark” price is the price for what the local real estate board deems is a “typical property within each market,” and in this case it reflects both condo and detached house prices.)
There, the typical household would have to come up with a 76-per-cent down payment of around $750,000. That would take a typical household 52 years to save, putting away 20 per cent of income every year.
In Toronto, making up the gap would take 32 years. No wonder people are turning to the bank of mom and dad, or moving outside the city to nearby places like Hamilton, Ont.
Watch: Why rents are soaring in Canada, and what we can do about it. Story continues below.
Saving up for decades is “not realistic for anyone, but it’s a way to illustrate what the (affordability) gap is like,” said Penelope Graham, editor in chief at Zoocasa.
“We wanted to highlight the median income ― just how different market conditions can be across Canada.”
The Liberals, Conservatives and NDP have all announced housing policies aimed at helping first-time homebuyers.
The Liberals are promising an expansion of the First-Time Home Buyer Incentive, with costs covered by profits at Canada Mortgage and Housing Corp.
The Conservatives want to extend mortgage amortizations to 30 years and to loosen the rules around the mortgage stress test.
The NDP have announced plans to boost housing construction by an additional 500,000 units, starting with an initial $5-billion investment.
