Shelter prices are so over-valued relative to income levels today, that saving just a 10% downpayment now takes 12 years on average, compared with just 5 years to save a 20% deposit twenty years ago. In many cases, people are trying to circumvent the waiting and saving period by borrowing even the downpayments. Whatever the approach, inflated shelter costs are keeping people from being able to meaningfully save for other critical necessities like education and retirement, and this is leaving the society increasingly vulnerable.
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It now takes about 7.5 years to save up for a down payment on a house in Toronto. In Vancouver, that number is over 10.5 years.
The data comes from the National Bank of Canada, which calculated how much it would take a median-income earner in several cities across Canada to save up enough for the minimum down payment on a median-priced home assuming they saved 10 per cent of their income. Here is a direct video link.
More than half of Canadians are living within $200 per month of not being able to pay all their bills or meet their debt obligations, according to a recent Ipsos survey conducted on behalf of accounting firm MNP. A whopping 31 per cent of respondents said they already don’t make enough to meet all their financial obligations and two-thirds of survey takers said they are “less than very confident” about their ability to create an emergency fund. Here is a direct video link.
