How much cheaper was it for baby boomers to buy houses when they were young?

Posted: 1 year ago
by: rob
in: Finance

Responses

Here's some research I did:

- All numbers are for the Greater Vancouver / Metro Vancouver area.
- All dollars are adjusted to 2021 Canadian dollars.
- Downpayments in 1975 were actually 25%, but I made it 20% for simplicity.
- I used a mortgage calculator to get the payment estimates.
- Only 36% of Canadian families had dual incomes in 1976, in 2015 it was 69%. Family incomes haven't changed, but the rate of working women has doubled.
- Cost of living has risen dramatically as well, but I haven't included any of that data.

|                                     |      1975 |       2021 | Change |
|-------------------------------------|----------:|-----------:|-------:|
| Population                          | 1,200,000 |  2,600,000 |  +116% |
| Average Family Income               |   $80,124 |    $80,051 |     0% |
| Average House Price                 |  $320,277 | $1,262,600 |  +294% |
| Variable Mortgage Interest Rate     |     8.70% |      2.15% |   -75% |
| 20% Downpayment                     |   $64,055 |   $252,520 |  +294% |
| Estimated Monthly Mortgage Payments |    $2,071 |     $4,350 |  +110% |

Imagine paying only $2,000 per month for a nice big home in Vancouver. Hilarious.

Obviously the Vancouver of 1975 is much different than modern Vancouver, but housing affordability has become a circus for young people. We have a much higher rate of working women yet total family incomes haven't changed.

Areas around Vancouver have had similar growth rates, so "just move to the suburbs" isn't a good answer.

For most people, real estate is an investment not a home. Low interest rates and skyrocketing prices has made a lot of baby boomers property rich. Home equity loans and other financing options have turned Canadian real estate into a retirement plan for the baby boomer generation.

So yeah, they had it pretty easy.

---

**Sources:**
- https://en.wikipedia.org/wiki/Demographics_of_Metro_Vancouver#Population_growth
- http://www.ccsd.ca/factsheets/fs_avgin.html
- https://www150.statcan.gc.ca/n1/pub/75-001-x/1998004/article/4039-eng.pdf
- https://www.bankofcanada.ca/rates/related/inflation-calculator/
- https://www12.statcan.gc.ca/census-recensement/2016/as-sa/fogs-spg/Facts-CMA-Eng.cfm?TOPIC=6&LANG=Eng&GK=CMA&GC=933
- https://open.library.ubc.ca/cIRcle/collections/ubctheses/831/items/1.0093238
- https://www.royallepage.ca/en/realestate/news/royal-lepage-canadian-home-prices-forecast-to-rise-5-5-by-the-end-of-2021-as-low-inventory-and-unmet-demand-set-to-fuel-price-increases/#_ftn2
- https://www.superbrokers.ca/tools/mortgage-rate-history
- https://www.canada.ca/en/financial-consumer-agency/services/mortgages/down-payment.html
- https://itools-ioutils.fcac-acfc.gc.ca/MC-CH/MCCalc-CHCalc-eng.aspx
- https://www.theglobeandmail.com/report-on-business/economy/percentage-of-dual-income-families-nearly-doubled-in-last-40-years/article30201042/

Here's some research I did:

All numbers are for the Greater Vancouver / Metro Vancouver area.
All dollars are adjusted to 2021 Canadian dollars.
Downpayments in 1975 were actually 25%, but I made it 20% for simplicity.
I used a mortgage calculator to get the payment estimates.
Only 36% of Canadian families had dual incomes in 1976, in 2015 it was 69%. Family incomes haven't changed, but the rate of working women has doubled.
Cost of living has risen dramatically as well, but I haven't included any of that data.

	1975	2021	Change
Population	1,200,000	2,600,000	+116%
Average Family Income	$80,124	$80,051	0%
Average House Price	$320,277	$1,262,600	+294%
Variable Mortgage Interest Rate	8.70%	2.15%	-75%
20% Downpayment	$64,055	$252,520	+294%
Estimated Monthly Mortgage Payments	$2,071	$4,350	+110%

Imagine paying only $2,000 per month for a nice big home in Vancouver. Hilarious.

Areas around Vancouver have had similar growth rates, so "just move to the suburbs" isn't a good answer.

So yeah, they had it pretty easy.

Sources:

Shallan • 1 year ago

Damn...

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