An increasing number of Canadian adults are living at home, especially in markets where housing is expensive.
Wendell Cox, urban policy analyst and principal of Demographia in St. Louis, Missouri, says housing was more affordable when boomers were young than it is today.
“In Vancouver … you might as well hang a sign from the Lions Gate Bridge that says ‘speculators welcome,’ because you’ve established a system where house prices go up more than any other investment. And don’t complain that speculators are coming in and ripping you off—that’s what’s happening, and it’s happening in Toronto as well.”
The affordability gap is shown by other metrics. Cox said historically in English-speaking countries, the median house price was three times median annual income.
“It’s now 13 times in Vancouver, 10 times in Toronto, almost six times in Montreal,” he said.
An online Leger survey of 2,000 Canadian boomers last month found one in five had a child living at home, ranging in age from under 18 to 30 and over. This was most likely in Alberta at 24 percent, and least likely in Atlantic Canada at 14 percent. These percentages were 28 in Vancouver, 26 in Toronto, and 20 in Montreal.
“All of the metropolitan areas around Toronto—Kitchener-Waterloo, Peterborough, London, Brantford—they’re all in terrible shape because of all the extra demand as people leave Toronto,” Cox said.
“There’s a huge outflow from Toronto, now averaging 50,000 net a year. And Stats Canada says much of them moved to places like those other metropolitan areas because of the lower housing costs.”
The high prices followed changes in urban design that took hold decades ago, he says.
“The whole thing is drawing lines around cities, urban containment, greenbelts, agricultural preserves, etc. And you’ve ruined your housing market. It’s all planners who think, oh, they’re doing great things because they want cities to look a particular way.”
Ontario Premier Doug Ford has presented mixed messages on developing the Greenbelt in southern Ontario. Cox says political backlash is the greatest hurdle for governments that contemplate changes to land usage.
“The answer is clear: You need to deregulate and let the market work. Except if you did that, you would blow the bottom out of the housing market, and anybody who tried to do that would no longer be in politics,” he said.
Carleton University business professor Ian Lee said both he and his partner had adult children who lived with them to save money for a down payment on a home.
“These are techniques of economizing, either because the person lost their job and they can’t afford their rent, or because the young person’s income is quite modest. And they want to live and have fun, and living at home means they don’t have to pay rent, which is significant. Or thirdly, some young people say, I can never afford to buy a house until I save up the down payment,” Lee said.
Part of the phenomenon may be owing to immigrants from cultures that are used to long-term inter-generational living. Lee suggested other possibilities.
“Some of those people living at home could have struck some kind of understanding with their parents and said, ‘Look I’ll stay home and I’ll look after you as you get older and get more frail, and when you pass on, I’ll get the house.’”
The Leger survey found that nearly two-thirds of boomers have paid off their mortgage and many are ready to help the next generation. One-quarter of boomers said they already had or would consider gifting or loaning money to a child to help them buy a home. The percentage was highest in Vancouver, at 34.
Twenty-one percent of boomers with kids at home don’t foresee them leaving. This percentage was 29 in Toronto, and just 8 in Alberta.
“It’s really a belief that in the future, will it be any better. Well, in Alberta they think it’s going to turn around eventually, whereas in Toronto, [no one] thinks that rents are going to suddenly drop from $2,000 a month to $1,000 a month,” Lee said.
A report in May by Scotiabank showed that there are fewer homes per capita in Canada than the G7 average, a shortfall of 1.8 million new homes.