Manitoba millennials priced out of local housing market: study

A real estate sold sign hangs in front of a home.
A real estate sold sign hangs in front of a home. THE CANADIAN PRESS/Graeme Roy

House prices in Manitoba have become unaffordable for the average millennial, according to a recent study.

The report – by Generation Squeeze, an advocacy group for people in their 20s, 30s and 40s – says average Manitoba home prices are 12 per cent more expensive than what young people between 25-34 can afford. ‘

The average home price in this province would need to drop by $34,000 for someone in that age group to be able to afford an 80 per cent mortgage at today’s interest rates.

Alternatively, young people would need to make, on average, $6,500 more per year to make current house prices attainable.

The Winnipeg Realtors’ MLS listings show the average house in 2019 is $331,620.

“Across the country a massive gap has grown between housing prices and earnings,” said Generation Squeeze founder Paul Kershaw.

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“In Manitoba, where the problem hasn’t grown as great, we’re seeing your province transition into a level of unaffordability that we don’t want to get any worse.”

Kershaw said when members of the baby boomer generation were buying their first homes, they typically had to save more than four years of full-time work to be able to afford a down payment.

For millennials in 2019, he said, that’s doubled. It’s now an average of eight years.

READ MORE: Winnipeg expected housing increase in 2019 identified as a ‘win’

Royal LePage Prime realtor Michael Walker says buying for young people is especially difficult because many of them are just graduating from university.

“They come out of school and they get thrown into the workforce where they’re underpaid. It takes a long time to accumulate that money. Usually they’re wanting to get out of their parents house at that age so the way to get out of it, if you don’t have money for a down payment, is you have to start renting. And once you start renting it makes it harder and harder to save every paycheck.”

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He says many of the younger home buyers are only putting five per cent down.

“Especially when we get into the stats of putting 20 per cent down as a down payment, that’s really rare. As a realtor I don’t see any younger generation person saving up 20 per cent for a down payment,” Walker said.

“If they’re coming out of university, there’s no way unless they haven’t spent a dime in the last 10 years that they have enough money for a down payment.”

Manitoba, however, isn’t in as rough as spot as some other Canadian provinces. The Generation Squeeze study said major cities in Ontario and British Columbia – namely Toronto and Vancouver – are experiencing the biggest disconnect between house prices and what young people can afford.

Kershaw said a multi-pronged approach needs to be taken to make changes in this area, especially when it comes to government involvement.

“In the lead-up to the fall federal election, we need all parties to commit to bold action that builds on some of the progress we’ve seen emerge in the past couple of years,” Kershaw said.

“Now is not the time to slow down efforts to modernize Canada’s housing market by simply hoping the massive gap between home prices and local earnings will resolve itself.”

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WATCH: A closer look at Manitoba’s real estate market

Click to play video: 'A closer look at Manitoba’s real estate market' A closer look at Manitoba’s real estate market
A closer look at Manitoba’s real estate market – Feb 6, 2019

Sandra Fry, Credit Counsellor with the Credit Counselling Society says it can take a lot of dedication to save for a home.

“Have a look at your budget and that means you have to track where your money is going every day and that’s going to help you tighten up those numbers,” she said.

“We’re a buy now, pay later society right now. So everyone’s told they deserve the newest, better, best and they go out to buy it and worry about paying for it later. Saving is really something that isn’t as done as often as it should be and it’s thought about after.”

Fry offered some tips for people looking to get ahead on their savings:

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  • Limit the amount of times you eat out
  • Take the bus, instead of your car
  • Consider getting rid of a second vehicle in the family
  • Get a part-time job

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