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Down payment for home in Vancouver quadruples in 40 years

Xinhua, May 26, 2016 Adjust font size:

A new report released on Wednesday shows that young Canadians nowadays have to spend much more on housing than their parents, particularly in Metro Vancouver where property values have skyrocketed.

The report, issued by Generation Squeeze and called "Why We Need to Rethink Canadian Housing Policy for Generations," crystallizes the challenge facing young Canadians trying to buy a house.

The report shows that the average price of a Canadian home has nearly doubled from 199,182 CAD (1 CAD = 0.77 U.S. dollars) in the 1976-to-1980 period to 408,068 CAD in 2014. In Metro Vancouver, the price has more than quadrupled to a whopping 813,000 CAD.

The study found it now takes local residents in the province of British Columbia 16 years of full-time work to save for a 20-percent down payment for a typical home, compared to only five years in 1976. In Metro Vancouver, it'll take a homebuyer 23 years to save enough money for the down payment.

"From a generational standpoint, British Columbia is now the hardest place to be a young adult in our country, and probably the continent, because it' s where wages have fallen the most and where housing prices have gone up the most than anywhere else," said Paul Kershaw, the report' s co-author and founder of Generation Squeeze, a national lobby group for Canadians in their 20s to 40s.

At the same time, annual earnings for a 25- to 34-year-old are down more than 9,000 CAD in British Colombia compared to four decades ago, said the report.

Young Canadians also get dinged with monthly mortgage payments, now 9 percent higher with earnings 9 percent lower compared to the 1976-to-1980 period.

In Metro Vancouver, where the average monthly mortgage payment is pegged at 3,555 CAD, homeowners now are required to work an additional five months each year in order to make that payment, said the report. Endi