Cost Of Living Skyrockets For Canada’s Millennials
About 30 years ago, a newly built house on a 1,200 square-feet property with a huge backyard was considered a starter home the suburbs of Winnipeg. Just three decades ago, buying property was far easier and far more attainable. Down payments were lower, mortgages easier to acquire, and with lower rates and there were no bidding wars. Often, properties were sold under the asking price. The situation now is completely different, and Millennials are suffering because of it.
The cost of living and economic climate has not been kind, and Canada’s younger generation often feels like owning their own home is a dream they’ll never realise.
Hard Work No Longer All That’s Needed
For those looking to buy their own houses in the current economy, home prices have skyrocketed. People’s earnings today have lost a fair bit of ground compared to 30 years ago. With inflation, there is a major discrepancy totalling thousands of dollars.
These days, Millennials (defined as those born between 1981 and 1996), will need to work an average of 14 years in Canada, or 24 years in the GTA, or even 28 years in the Metro Vancouver region, in order to pay a down payment of just 20% on a house. Paul Kershaw, the Founder of Generation Squeeze, said that hard work does not pay off like it used to.
In 1976, the majority of boomers, defined as those born between 1946 and 1965, were coming of age and looking to buy houses. During this time, one would only have to work for five years to achieve the same feat.
Debt Restricting Millennials Even Further
According to Mr. Kershaw, the reality for young people is that they now have to go to school for longer, pay more to be educated, work for a lot less money and face rising housing costs on top of paying off mountains of debt. This, he says, is what has caused this generation to delay starting their own families. For example, the median debt for Millennial Canadians reached $35,400 in 2016 compared to $19,400 for young people in 1999.
Kershaw added that this had made many Millennials question whether or not they were doing anything wrong when in fact, this is not a situation that is specific to one person. This is a societal, political and economic issue.
The problem is that the cost of living keeps on rising and there seems to be no end in sight. The status quo will only improve if the issue is addressed on all levels.