This Is How Long GTA Millennials Have To Work To Afford A Down Payment On A Home
And that's if they're working full-time too.
If you're looking to buy a home in the GTA, or anywhere in Ontario for that matter, you might want to start saving now (that is if you haven't already).
A recent report by Generation Squeeze, an organization for intergenerational fairness, showed how many years Ontarians would need to save in order to buy a house in the province's pricy real estate market, and broke it down by region, too.
With the current house prices in the GTA, a new homebuyer between the ages of 25 and 34 would have to work full-time for 27 years in order to save enough money for a 20% downpayment for the average home. According to the study, that's 21 years more than when "today's aging population" had to save up for when they were this age.
"To own a home, one must be able to save the down payment and carry the mortgage. Saving a down payment depends on the relationship between home prices and earnings," the report reads.
So, in order for millennials to buy a house with their current average earnings, Generation Squeeze revealed that the average home prices in the GTA would need to fall by over $750,000 in order to make it affordable, and so that they can handle an 80% mortgage at the current interest rates.
It's either that or salaries would need to be bumped up to $172,000 a year, which the report said is "more than triple" the typical full-time earnings.
What about the rest of the province?
For prospective homeowners looking to buy a place anywhere in Ontario, it takes 22 years of full-time work to make enough money to put down a 20% downpayment.
In Ottawa it takes 14 years, the Kitchener-Waterloo area takes 20 years, London 19 years, Windsor 14 years, and the Hamilton-Burtlington area 22 years.
According to the report, Ontario suffered the worst "erosion of housing affordability" seen by any other Canadian province over the span of two years in the last half-century.
"The findings presented in this report underscore that housing should be at the forefront of Ontario's June 2022 provincial election," the report reads.
"As concern with inflation and cost of living escalate, reining in the skyrocketing housing prices that are crushing affordability is a critical step to support younger and future generations, and renters and newcomers of all ages."