Canadians aspiring to buy a first house or condominium could be forced to wait until they reach middle-age, especially in Vancouver, where the average buyer must save for over two decades to afford a down payment, a new report found.
Vancouver leads Canada in housing unaffordability, with average home prices topping $1.65 million and down payments exceeding $240,000, according to the study from Bloom Holding, a developer of mixed-use communities based in the United Arab Emirates.
The report calculates how long it takes to save for a down payment based on home prices, net monthly income, tax rates and savings behaviour, assuming buyers start putting away money at 23.
The study estimates the age of a first-time buyer of a house or condominium to be 46 in Vancouver, 40 in Toronto and 39 in Montreal.
Canada's three biggest cities are ranked near such cities as London, Sydney and San Francisco, where high housing costs, slow wage growth and steep taxes combine to delay ownership well into buyers’ 40s.
"High prices relative to income and large down payment requirements cause difficulties" in Montreal and Toronto, the study said.
The Canada Mortgage and Housing Corp. estimates Canada needs to build up to 480,000 new homes a year for a decade to restore affordability, a 70% increase over current rates of completions.
Canada’s federal government is attempting to make housing more affordable through its $13 billion Build Canada Homes initiative led by former Toronto City Councillor Ana Bailão. The effort aims to increase prefabricated housing and build on federal lands, among other approaches.
Statistics Canada data from the most recent census illustrates the difficulties young Canadians have encountered in their quest for shelter.
Homeownership rates among Canadians aged 25 to 29 dropped from 44.1% in 2011 to 36.5% in 2021, while rates for those aged 30 to 34 fell from 59.2% to 52.3% over the same period.
In contrast to cities where homebuyers must save for decades, Bucharest, Romania; Budapest, Hungary; and Vilnius, Lithuania offer far easier paths to ownership, with entry-level buyers able to purchase homes in their mid-20s, according to the Bloom Holding report.
In Bucharest, for example, low property prices and relatively strong wages mean a buyer can save enough money to buy a home in just two years.