Home decor has long been an affordable way to decorate a home, but a new study suggests it’s now more expensive than ever.
The Globe and Mail’s Lisa Bowerman reports.
0:55A new study from the Fraser Institute says the cost of buying a house in Canada has jumped from $4,200 in 2014 to $6,500 in 2020.
While the cost was about the same in 2011, it rose by more than $1,200 by 2020.
“A house in a big city like Toronto, it’s a little bit cheaper now, but you’re going to have to spend a little more,” said David Mowat, a Vancouver real estate agent.
The Fraser Institute’s annual survey of house prices in Canada found prices are now the highest in decades, while incomes are rising faster than incomes, and housing stock is at risk of being over-built.
The study shows median household income in Canada is now $72,000, up from $61,000 in the mid-1980s.
But median prices have risen faster than median incomes, up 10 per cent over a five-year period.
“I think it’s pretty well established that we’re seeing a major shift in the composition of the housing market,” said Mowats associate professor of economics Peter Hulsman.
“There are more families living in bigger homes, but there’s also a lot more affordable housing, which means the cost per square foot has been growing faster than wages over time.”
For the Fraser study, Hulsmann looked at five different indicators of house price and income, including household size, household income, the average price per square-foot, median home price and average household income.
The index of housing affordability was also used as an indicator of affordability.
Housing prices in Ontario and Quebec have gone up more than 20 per cent since 2015, while prices in British Columbia have risen more than 12 per cent, with the largest increases occurring in the Greater Toronto Area and British Columbia’s interior.
For many, the new research makes the housing boom look a little less attractive.
“We’ve had this housing boom that was supposed to last a couple of decades, but it’s gone from $6.5 million to $8.6 million,” said Michael Waugh, who runs a Vancouver home-building company.
Waugh said he’s had some offers to buy his Vancouver home in the past couple of years, but he’s not interested.
“You can get a home for about half the price it’s going to cost, and the people in my situation that are working on that house will get paid more than the people on the street,” he said.
Wurt’s house sits on a lot of land and is on the edge of a residential neighbourhood.
It’s about 1,000 square feet, which makes it hard to sell if you’re looking to buy a house on a single lot, said Waugh.
Wats house, along with some other properties in Vancouver, is at a crossroads in the region.
The city’s new mayor, Gregor Robertson, said this could be one of the biggest housing markets in Canada, but the city is also looking at its own housing affordability issues.
“The question is whether Vancouver is going to continue to be one the top cities in Canada or if it will be one where the affordability is becoming more of a concern,” he told reporters.
Hulsman said he thinks that the affordability question will likely be a sticking point in the future, and there could be more to come.
“It’s clear that affordability is an issue,” he says.
“But it’s not something that’s going away overnight.
So it’s important to remember that these issues are not solved overnight.”