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Canadian First-Time Homeowner Prices: Today vs. 1977

Canadian First-Time Homeowner Prices: Today vs. 1977

Are millennials able to afford what baby boomers once were, or has the landscape changed drastically?

With inflation rates rapidly rising and the cost of owning property quickly growing year over year, we thought it would be interesting to take a look at what first time homeowners are able to get for their dollar today, in comparison to what was available on the market in 1977.

Are millennials able to afford what baby boomers once were, or has the landscape changed drastically?

Inspired by findings in a recent article via the Huffington Post, here’s a look at profiles of typical first-time homebuyer neighbourhoods in Toronto and Vancouver. To come up with these figures, data about housing construction, first-time homeowner incomes (ages 25 to 34) and house prices were used from 1977 and 2017, which is the most recent year for which complete data is available.

Toronto in 1977

Average property size: 2,070 square-foot home in the suburbs

Average first-time buyer household income: $73,500

Maximum purchase price: $340,600

Average selling price: $247,000

Maximum monthly payment: $2,500

Maximum mortgage: $318,000

Toronto in 2017

Average property size: 647 square-foot condo in a high-density neighborhood 

Average first-time buyer household income: $82,500

Maximum purchase price: $505,000

Average selling price: $794,000

Maximum monthly payment: $2,290

Maximum mortgage: $499,000

Vancouver in 1977

Average property size: 2,180 square feet suburban home

Average first-time buyer household income: $79,600

Maximum purchase price: $369,000

Average selling price: $306,000

Maximum monthly payment: $2,667

Maximum mortgage: $342,000

Vancouver in 2017

Average property size: 800 square foot condo in the suburbs 

Average first-time buyer household income: $75,000

Maximum purchase price: $500,000

Average selling price: $998,000

Maximum monthly payment: $2,262

Maximum mortgage: $494,000

The results show that in Canada’s priciest cities, Toronto and Vancouver, today’s first-time homeowners can afford roughly a third of as much space as their counterparts in 1977. However, it’s important to note that while property price tags have skyrocketed, interest rates have fallen and have kept monthly mortgage payments consistent. The minimum down payment required for an insured mortgage also fell to 5% in recent years, from the original 10% in 1977.

Curious to know what kind of property you can afford as a first-time homeowner? Give Capital Mortgages a call today at 613-228-3888 and we’d be happy to help.

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