Forty years ago, when my parents bought their first house in Toronto in the late 1960s, they paid about $20,000. It was detached, located in a solid neighbourhood, close to good schools and parks.
Everyone on our block owned their house. No one was rich. Families nearby were middle class and getting by on a single income.
Today, home ownership is a pipe dream for many Canadians, especially members of what’s been dubbed “Generation Squeezed” — folks like me who are in their 20s, 30s, and early 40s and struggling to get by on two incomes in a world of zero salary growth and soaring real estate prices in some markets.
Derek Atkinson told his story here on the news the other day. At 28, he is a typical squeeze-generation guy — married with a two-year old and living in Vancouver, one of the most expensive cities in North America. He says home ownership is out of reach for his family. He and his spouse earn a healthy combined income of $92,000 a year. They even qualify for a $500,000 mortgage, but that’s not enough to buy a house in the city they live in. Plus, with expenses like child care and rental housing they can’t even come up with the $25,000 needed for a down payment.
Derek’s story speaks to the hugely frustrating experience of his generation — they can clearly see the stark gap between our parents’ lives (nice, affordable house) and ours (unaffordable housing).
Does this seem fair? Absolutely not. Is it reality? Unfortunately, yes.
Today, home ownership just isn’t a smart investment for a lot of people. Sure, our parents saw buying a house as a rite of passage. But for younger Canadians today, it’s a huge burden that could cripple them financially in the future.
That’s why I think Canadians need to do a close and careful reality check before they set their financial goals. Is owning a home worth crushing debt levels? Keep in mind, it’s about a lot more than just mortgage payments — there are utilities, property tax, repairs, maintenance…and don’t forget dealing with emergencies, like a leaky roof, that can deplete your savings.
In Canada, we’re raised to think emotionally about buying a home — it’s your nest, your castle, the place where you build dreams. But today that dream comes at a hefty price, and we need to ask whether or not it’s worth it.