ontario housing crisis
economics,  personal finance,  real estate

Millennials Woes – Ontario’s housing crisis is delaying adulthood

Millennials, it appears that you’re being economically squeezed out of the transition to adulthood. An excerpt from the news article by CBC News’ Kate McGillivray, April 5, 2017:

A new report out from Vancouver-based campaign Generation Squeeze says Ontario has the second-worst economy for young people in the country, eclipsed only by British Columbia.

“No province reports a decline in full-time earnings [for the typical 25-34 year old] since 2003 except Ontario. That wouldn’t be so bad if Ontarians’ primary cost of living — housing — was also not going up in price,” said the lobby group’s founder and University of British Columbia professor Paul Kershaw.

The report, part of the Generation Squeeze’s Code Red campaign, suggests that a housing affordability crisis in Ontario is affecting quality of life and causing young people to put off important milestones, said Kershaw.

“They delay starting their own homes, moving out of their parents’ homes, and starting their own families,” he said. “This is compromising a range of family formation aspirations people have.”

The report’s data, gathered largely from Statistics Canada, explains the financial reasons behind that delay: the average house in Ontario has increased in cost by more than $300,000 after inflation since the late 70s and early 80s.

Meanwhile, full-time earnings have fallen by $4,600 in that same time frame, putting Ontario’s young people below the national average when it comes to income for full-time work.

So what are the long-term consequences of this?

If Millennials spend less money on housing, they will also spend less money on acquiring appliances, furniture, vehicles, etc.  They will also delay having children (or eschew having children altogether) due to the costs of daycare, clothing, etc.

So we can look forward to a doubly-whammy of a declining population (unless offset by increased immigration) and a decline in spending. This will have a long-term ripple effect on the economy.

Original article

Victor is the President of Fong and Partners Inc. He is a Licensed Insolvency Trustee and Chartered Professional Accountant. With over 20 years of experience in the insolvency field, Victor has been involved in both corporate and consumer insolvency engagements. Previously with a large national firm, Victor founded Fong and Partners Inc. in 2007 so that he could dedicate his professional life to help people from all walks of life to deal with their debt.