To bemoan the state of the Canadian housing market nowadays is a common pastime among those looking to buy homes. Prices have been rising for the past 25 years and it is well known that most young adults who grew up in Vancouver cannot afford any property in the city. The sentiment has been around so long that the a web game called Crack Shack or Mansion, in which the user must guess if a pictured Vancouver home was the site of a crack bust or a home valued at over a million dollars on the Vancouver market, remained popular from 2010 until Adobe Flash could no longer run it. These high real estate prices are not contained to the West Coast however; the average price of a home in the GTA has now surpassed 1 million dollars.

In 2020, real estate prices skyrocketed in cities all across the nation, with Ottawa and Montreal home prices increasing by more than 10% and the Nova Scotia market jumping by 30%. Canadians are taking on increasing amounts of debt just to keep up with these soaring prices. Manifold reasons for the inflated prices exist, from government restrictions, to a growing population, to speculative buyers driving up prices. Foreign buyers leaving apartment buildings vacant have also helped to constrain the already abysmal supply of real estate in Canada's largest cities, which raises questions about how much of an impact organized crime is having on Canadians' ability to buy homes.

Another factor to consider in Canada’s housing crisis is immigration. Canada brings in more than 300,000 immigrants every year. These immigrants need a place to stay as soon as they arrive and they tend to reside in Canada’s larger cities, where the housing shortages are the worst. Increasing the population through immigration, rather than through the traditional form of native reproduction, can put a unique strain on the housing market because each immigrant family immediately requires an entire unit to itself. In the case of population increase through native reproduction, children born to Canadian families won’t need a place of their own to live in for at least the next 18 years. With all this population growth (nearly 1% each year) we would at least expect that there are houses being built in order to keep up, but there has actually been a dip in housing starts in the past few years, meaning that the housing shortage will only get worse for the foreseeable future.

These rising home prices are all set on a backdrop of stagnant wages and rising costs of living. 83% of Canadians are frustrated with their current salaries, most citing cost of living, and they should be. StatsCan actually shows a decrease in the median male Canadian's salary over the last forty years. Meanwhile, the cost of living has steadily risen. The average young Canadian today would need to work full time for 14 years in order to afford a 20% down payment for a mortgage, compared to 12 years in 2019 or 5 years in 1976. For large swaths of our current youth population, those time frames simply don’t work. If a young person gets a 4-year professional degree, they won't enter the workforce until the age of 22. This puts them at 36 years old before they can even begin to pay off their new purchase. In 2018, nearly half of first-time homebuyers were between the ages of 25 and 34; if predictions hold true then in the next 10 to 15 years the average first-time homebuyer will be even older.

So what is the plan for young Canadians? Most will want to eventually own a home, but for many, that is simply not an available option in the near future. Even with a good job, some savings, and the best possible planning, the outlook can seem quite bleak. Speculative buyers don’t seem likely to drop a hot asset any time soon, and older generations will assuredly hold onto their best performing asset, on top of needing a place to live. With most homeowners above the age of 65, it could be that the following decades will see some of those houses willed or sold to younger generations. But this is hardly a solution to be relied upon.

The most viable strategy for young prospective homebuyers seems to be to hope and pray for a crash. Many them see the market as a bubble that they hope will burst so as to level the playing field and allow them to find a home for an affordable price. However, this crash wouldn't happen in a vacuum. Housing is intertwined with Canada's economy as a whole, making up nearly 10 percent of Canada's GDP. A crash in the housing market would surely have negative impacts across the board. But, as things stand currently, Millennials and Gen Z don’t seem to be benefiting very much from Canada’s speculative economy. The outlook of these generations does not bode well for the current forecast of the country's future in this regard and should be seen as a sign that something needs to be fixed. If Canada’s real estate market is making our young people wake up every morning and check the news, hoping to learn of an economic collapse, that means it is time for the government do more than simply monitor the housing market.