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More than a decade of sky-high housing prices is changing society, according to a new report by Desjardins Group.
Terrible housing affordability is forcing adults aged 34 and younger to flee the cities in which they grew up, the report said. Younger Canadians also are putting off marriage and waiting longer to have children, decisions Desjardins chief economist Jimmy Jean and his team said relate to the instability of renting or residing with family.
“Canada’s youth need more than just policy announcements and prayers; they need urgent action,” Jean, Randall Bartlett, Marc Desmoreaux and Kari Norman said in the report, released May 24.
Many say Canada is experiencing a housing crisis brought on by an extended period of low interest rates, strong demand from younger Canadians and immigrants, and chronically depressed supply.
It would take some 3.5 million additional homes to restore a semblance of affordability, according to the Canada Mortgage and Housing Corp. Low supply might be the main reason housing affordability has gone off the rails.
The Desjardins report said home prices as a share of disposable income rose to record highs in 2022, and that the situation likely worsened given prices for resale homes in Canada have soared 17 per cent since the start of the year, according to the Canadian Real Estate Association.
“The data is clear: Canada is dealing with historically severe housing affordability constraints,” the Desjardins report said.
Statistics Canada reported earlier this year that housing affordability and rising house prices “disproportionately” influenced young people’s decision to move.
Younger Ontario families are escaping Toronto’s expensive housing for cheaper markets; Toronto’s contribution to population growth in the 25-39 age group dropped almost two percentage points in 2021-22. At the same time, population growth in smaller, adjacent cities such as London, Windsor and Hamilton increased.
The anxiety caused by housing worries is affecting life decisions. “Debt burdens and affordability struggles affect life choices other than where to live and whether to rent or buy a home,” Desjardins said.
For example, an increasing share of Canadians aged 15 and older are living alone. The average age of marriage has increased to 31 from 27 in 1990. While some attribute that to an increase in co-habitation, the Desjardins economists counter that data show a rise in the number of youth remaining single.
What’s more, women are having children later; like marriage, the average age to start a family has risen to 31 from 27 over the past three decades, the report said. Women are having fewer children, and the authors presented a survey that suggests financial worries could be a factor. The average age for childbirth is highest in Ontario and British Columbia, home to some of the least affordable cities in the country.
“(Housing) is one of the most pressing issues of our time, and governments of all levels need to take it seriously if young Canadians are going to achieve the same level of financial security as Canadians who came before them,” the authors said.
