The 鈥渄ramatic鈥� gap between the cost of owning a home and the ability of Canadian millennials to afford one paints a 鈥渢roubling portrait鈥� of an expensive country, according to a new report.

Average home prices would need to drop by half -- some $223,000 -- to be affordable for the typical Canadian aged 25 to 34, or average earnings would have to double -- to $93,400 -- found the non-profit group Generation Squeeze in a study titled 鈥�.鈥�

The group stresses that 鈥渢here is no silver bullet鈥� to solve the dilemma. 鈥淚nstead, silver buckshot is needed to address these issues across several fronts,鈥� the report says.

Along with the Canada Mortgage and Housing Corporation (CMHC), Generation Squeeze has adopted an affordability target of 2030. Affordability is assessed by CMHC standards as spending less than 30 per cent of pre-tax earnings on housing, and the ability to carry an 80 per cent mortgage on an average priced home. According to the CMHC, Canadian household debt reached a record high at the end of 2018 even as mortgage activity slowed down.

Saving for a home is now a potentially decades-long effort, the report says. It takes the average millennial 13 years to save a 20 per cent down payment on an average priced home, while it took their parents just five years around 1976.

鈥淚t鈥檚 crushing those who walk in their footsteps,鈥� said lead author Paul Kershaw, a policy professor at the University of British Columbia.

Toronto and Vancouver are often thought of as the only cities with unattainable housing, but the report makes it clear that the gap between the cost of owning a home and the ability of millennials to afford one is widespread.

鈥淚t鈥檚 not just Toronto or Vancouver,鈥� said Kershaw. 鈥淭he gap is large in Victoria. The gap is large in Kelowna. It鈥檚 large in multiple cities like London, Kitchener, Ottawa and Hamilton. There鈥檚 a gap that鈥檚 problematic in Calgary, Fort McMurray, Edmonton, Halifax, Montreal, etcetera. Even Manitoba has crossed the threshold where home prices are challenging for younger Canadians.鈥�

Still, the provincial data in B.C. and Ontario is most striking. Earnings need to jump to $109,000 annually in Ontario, or homes prices drop by $307,000. The data is bleaker still in B.C., where salaries would have to triple to $136,200, and prices would need to fall by $452,000 to achieve affordability.

A handful of provinces remain 鈥渞elatively affordable鈥� -- Saskatchewan, Manitoba, , New Brunswick, Newfoundland & Labrador and Nova Scotia -- but the report stresses that for more than 90 per cent of Canadians, this is not the case as less than 10 per cent of the population reside in an affordable province.

To achieve 鈥渨idespread housing affordability鈥� by 2030, offered some policy recommendations in the report aimed at party leaders planning platforms heading into the federal election.

鈥淭here may be a little bit of emerging apathy amongst leaders right now because they鈥檝e been hearing from the real estate industry that home prices are no longer rising at their historically high profitable levels where they were a couple of years ago,鈥� said Kershaw. 鈥淚f home prices are levelling off right now, they鈥檙e levelling off at near historic highs.鈥�

Generation Squeeze suggests non-housing costs such as expenses related to child care, student debt and transit costs can play an important role. As renting becomes a longer term reality for millennials, the group suggests that the cost of renting be more aligned with earnings and that more 鈥減urpose-built rental housing鈥� is made available. For markets in Saskatchewan, Manitoba and much of the Maritimes where affordability is still a reality, the report suggests measures to ensure it is not lost there too.

The report suggests a new housing policy framework, including a second phase of the , a timeline of 2030 for affordability and a 鈥渉omes first鈥� policy.

鈥淭his is a reminder that housing first has to be a place to call home,鈥� said Kershaw. 鈥淣ot a stock market, not a way to launder money, not a backyard that protects you from all other changes in the neighbourhood, and generally not a strategy to get rich.鈥�

WHERE YOU LIVE: Price drops and earnings needed

Metro Vancouver

  • -$795,000
  • $200,400/year

Victoria

  • -$413,000
  • $134,000/year

Kelowna

  • -$239,000
  • $100,000/year

GTA

  • -$523,000
  • $150,000/year

Hamilton

  • -$284,000
  • $107,000/year

Kitchener

  • -$206,000
  • $107,000/year

Ottawa

  • -$131,000
  • $78,200/year

Montreal

  • -$131,000
  • $72,400/year

Calgary

  • -$148,000
  • $88,000/year

Edmonton

  • -$76,000
  • $72,000/year