Nowhere is the Canadian housing price crunch more apparent than in how long it will take for average households to pay for their desired homes.
A new study by real estate information portal Zoocasa found that Canadians with earnings at the median level of $70,336 before taxes will qualify for a mortgage of $280,703.
Assuming a savings rate of 20% of annual income, the shortfall of $346,697 means that these mid-income households will need around 25 years to save up for a home valued at the national average $627,400 as of August.
The situation is even more precarious in Vancouver, where a median-earning household ($72,662 before taxes) can qualify for a mortgage of only $241,994 — and thus will need a staggering 52 years to make up for the shortfall on average-priced home at $993,300.
Fraser Valley is another market where consumer-friendly prices appear to be an ever-distant dream. Median-income households in this region (earning $69,289) will qualify for a mortgage of $247,404. With an average home price of $823,300, they will need 42 years to save up for paying off the shortfall.
Over the last few years, Greater Toronto has seen no shortage of affordability horror stories. Featuring an average home price of $802,400, mid-income buyers who are somewhat more fortunate compared to the rest of the nation (earning $78,373) will still need 32 years to fully pay for their houses.