With the federal election mere days away, the topic of housing affordability – and just what the next sitting government plans to do to alleviate it – continues to be at the top of Canadians’ minds.
In fact, according to a recent national survey conducted by Zoocasa on housing sentiments, a total of 84% of respondents agree that housing affordability is a major issue that’s negatively impacting Canadians, while 78% feel that government needs to make it a priority.
So, what do Canadians think needs to happen to address this issue? Let’s take a look at the survey highlights.
Incomes aren’t keeping pace with home values
Not surprisingly, the stratospheric growth of home prices, particularly in Canada’s largest urban markets such as houses for sale in Toronto or Vancouver, has rapidly outpaced that of incomes, which leaves prospective home buyers hundreds of thousands of dollars short. For example, consider that the median-income household in Ontario’s largest city earns $78,373 – well below what’s required to purchase the average priced-home in the region at $843,115.
A total of 91% of Canadians feel this is the case in their own city or town, with an additional 92% saying that rising home prices have made it challenging for middle-class Canadians to buy their first home. They also view homeownership as a widening gap between the “haves” and “have-nots”; 65% feel it’s the top socio-economic divider today.
The inability to purchase real estate locally is also fueling a buyer exodus to more affordable markets – 52% of those who identified as first-time home buyers said they’d consider moving to a more affordable city or town.
Current homeowners also feeling the squeeze of rising prices
While it’s no surprise that rising home costs pose hurdles for those trying to buy a home, surely runaway price growth is welcomed by those already on the property ladder? According to the survey, even this group of Canadians are feeling some financial stress as a result of eroding affordability.
While 69% of those who identify as homeowners agree that owning property has been effective in helping them build wealth, 54% report that their home carrying costs have increased at a faster pace than their incomes since they’ve purchased their homes.
As well, this group of homeowners, who tend to trend higher among older demographics, acknowledge that they greatly benefited from getting into the market when it was more affordable – 66% said they felt they may not be able to afford the home they currently live in, if they had to purchase it for the first time in today’s market conditions.
Other obstacles to homeownership
While rising home prices are the largest hurdle to getting into the market, with 70% of respondents in agreement, they’re not the only reason Canadians are finding homeownership challenging. According to the respondents, they are also struggling with earning enough income (64%), and saving for a down payment (58%).
The latter comes with its own specific challenges: 68% said that their incomes aren’t high enough to effectively save, while 40% said they’d need more time to save. As well, the high cost of rent is proving to be a detriment, with 39% saying it’s preventing them from saving a large enough nest egg to break into the ownership market.
Written by Penelope Graham