Housing in the Hamilton-Burlington area ‘remarkably unaffordable’ for young people, new report finds
A typical young person in Hamilton would have to work full-time for more than two decades to save up for a 20 per cent down payment on an average-priced home in the region, a new study has found.
The latest Straddling the Gap report, conducted by the Generation Squeeze lab out of the University of British Columbia (UBC), looked at the difference between home prices and earnings across Canada between 1976 and 2021.
Looking at the Hamilton-Burlington area, the study found that in 2021 it would take a person between the age of 25 and 34 at least 22 years of work to save the down payment for an average-priced home, which was close to $900,000.
That's 18 more years compared to when today's aging population started out as young people back in 1981, according to the report.
And despite the cooling of home prices in the region, which tumbled to $808,928 last month per local real estate data, housing remains remarkably unaffordable," said Paul Kershaw, founder of Generation Squeeze and author of the report.
It's pushing more and more young people out of the ability to get into home ownership early in their lives," said Kershaw. Their hard work doesn't pay off like it used to."
The study found that typical full-time earnings for young people would need to climb to $136,000 a year - marking a 160 per cent jump over current levels - to bridge the affordability gap.
Alternatively, average home prices in the region would have to plummet by more than half a million dollars for a young person to sustain a mortgage that covers 80 per cent of the value of an average-priced home at current interest rates.
That's not going to happen," said Kershaw. And that would cause a great deal of disruption in the housing system."
Kershaw said while there isn't a silver bullet" solution to closing the gap between earnings and home prices, the organization has pitched several recommendations for all levels of government.
One of those fixes includes a proposed surtax on homes valued at more than $1 million, which could in turn generate revenue that could be invested in deeply affordable" housing, he noted.
Kershaw also pointed to the need for building up housing density in land that's zoned for residential use - as opposed to opening up portions of the Greenbelt for development, which the Ford government has announced its intentions to do.
In Hamilton, the Ontario government has proposed developing housing on 1,400 acres of the protected farm and natural lands.
We can't solve our wallet problems by neglecting our climate problems," he said. Let's not disturb that asset (the Greenbelt) to address housing unaffordability."
The Hamilton-Burlington area lands in the top five most expensive communities for young people across Canada when it comes to housing, according to study.
The region is ahead of London and Kitchener-Waterloo, but falls behind the Greater Toronto Area (GTA) and Metro Vancouver.
Kershaw said it would take a typical young person in the region giving up 19 fancy $5 coffees a day, every day, for five years to make up the down payment they'd need to purchase a home.
However, he noted that that false motion actually distracts attention from the realities" of the current housing system in Canada.
It reinforces the status quo and disempowers young people," said Kershaw. It implies that the younger person is making bad decisions and that's why can't afford a home."
Fallon Hewitt is a reporter at The Spectator. fhewitt@thespec.com