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