High-costs of living are negatively impacting Canadian’s mental health. The biggest issue behind home unaffordability is that housing prices, especially in urban centres, have exponentially increased over the last ten years in comparison to the rate of inflation and wage increases. Many people believe that the affordability problem is only in larger cities, but it’s beginning to spill over into neighbouring cities like Calgary, Fort McMurray, and Montreal.
In order for Canadians aged 25-34 to be able to afford a home, housing prices would have to drop by half, or average earning would need to double to approximately $93,000.
Renters Feel the Brunt of High Housing Costs
Renters appear to be more affected by housing prices in comparison to homeowners. That is most likely because homeowners have more control over their living situations, while renters are living with uncertainty. Their landlords may decide they no longer want to rent their property or want to do a major renovation, which will mean that they need to find a new place to live.
Homeowners and Housing Stress
Homeowners still feel the stress of high housing costs even after purchase due to the carrying costs, such as the mortgage, property taxes, and insurance, all of which are increasing every year. A number of homeowners in Canada have reported that the costs of buying a home or condo in their city are increasing at a faster rate than their incomes. This has made it challenging for many Canadians to purchase their first home.
Only a few provinces are relatively affordable, such as Saskatchewan, Manitoba, and New Brunswick.
Reasons why houses prices are so high according to real estate experts:
- Baby boomers are living longer, and staying in their single-family homes, making them unavailable for younger people.
- Money laundering through housing form foreign and domestic buyers.
- Larger Canadian cities like Toronto and Vancouver attract thousands of people a year, which drives up demand, but there is not enough supply.
- A majority of the Canadian housing stock is single-family homes, which is the most expensive housing on the market. In addition, housing developers control the supply and only allow a certain number of houses to be on the market.
- Rental housing costs and detached houses stay high due to demand.
- Rental apartments are not being built to accommodate the housing needs of Canadians because of the short profits that can be made from building and selling condominiums.