It’s a common refrain from older Canadians: “Every generation has to work hard,” or, “You’ve got to pay your dues to get ahead”, but research by a UBC professor says it’s actually much harder for young people to get ahead today than it was for their parents.
Young people face eye-popping house prices, pricier mortgages, and more expensive child care, says Paul Kershaw, from UBC’s School of Population and Public Health. With lower wages, to have the same purchasing power as their parents, young people would have to work months longer each year. The major costs of living are skyrocketing while our income is declining.
In Canada, average home prices in 1976 were just $206,000 in today’s dollars. Today, the average home value is twice that, at $408,000. Lower interest rates would help affordability – but they’re not low enough today to make up the difference, he found.
Even at the high rates in the late 1970s, between 10.3 per cent and 13.4 per cent, Kershaw found that the average monthly mortgage was $1,479. At today’s rock-bottom interest rates, the average monthly mortgage on the average Canadian home is $1,785 – about $300 higher.
Wages for young people today are 9 per cent lower. That means they would have to work an extra 13 hours a month to cover this average mortgage. That adds up to another month of work each year.
In Vancouver, where average home prices have tripled since 1976 to $812,000, young people are even further behind: the average mortgage would cost $3,555 – more than twice what their parents faced.
Another sobering statistic Kershaw found: in 1976, it would take the average Canadian five years to save for a down payment for a home. Today, that’s risen to 12 years. In Toronto, it’s 15 years. In B.C., 16 years, and in Vancouver, 23 years.
“We solved big problems in the past. Let’s renew our enthusiasm for that now. Because housing is crushing generations from coast to coast to coast, especially in Metro Vancouver,” he said.
Read more: http://bc.ctvnews.ca/young-people-have-it-tougher-than-parents-ubc-prof-1.2731530
