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

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rob
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Kaladin 7 months ago

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:

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