A new report suggests homeownership is slipping further out of reach for young people in Ontario, with more than 40 per cent of their monthly income now going toward housing in many areas.
The report, led by economist Mike Moffat at the Missing Middle Initiative and commissioned by the Ontario Home Builder’s Association (OHBA), found that 11 of 26 municipalities analyzed in Ontario were “completely unattainable” for middle-class households.
“Young people are out of options when it comes to housing in our province,” said Scott Andison, CEO of OHBA. “Unfortunately, unless you earn far above the average salary or can get assistance from family members, your hopes of buying a home in Ontario are slim.”
The report shows how affordability has eroded over the last 20 years.
While house prices have more than doubled since 2005, wages after inflation in Ontario have only grown by 16 per cent.
In major markets like Toronto, Hamilton, Kitchener, Waterloo, Guelph and Barrie, the price-to-income ratio now exceeds seven — meaning homes cost more than seven times the average pre-tax income.
Andison said the current system is unworkable for both builders and prospective homeowners.
“It’s a bit like the wild west right now,” he said. “The Town of Caledon has the ability to ask for over 70 types of reports from the builder during the application process. You can’t expect a builder to fill out 70 applications to put in 100 new units in a subdivision.”
He noted that the types of housing being proposed have also changed.
“We see so many homes being converted to rental,” he said. “Only applications being put forward right now are rental housing.”
The affordability crisis is reflected in recent polling as well.
A Scotiabank poll found that only 26 per cent of Canadians aged 18 to 34 currently own a home, down from 47 per cent in 2021. The number of young people living with family rose to 29 per cent, while 43 per cent are now renting—up from 29 per cent.
Meanwhile, in a separate Ipsos poll conducted for Global News last year, 45 per cent of Canadians said they don’t believe they’ll ever be able to afford a home, regardless of interest rate cuts.
“We advocate any responsible move that is going to lower the cost of living,” Andison said. “The biggest thing that can be done federally is lower the cost of infrastructure.”
The OHBA is calling on all levels of government to cut development charges, streamline approval processes, and invest in resources to support new homes. “The government needs to acknowledge that we are in a housing crisis,” Moffat said.
The board also suggested that changes like cutting taxes on development charges, streamlining approval processes at the municipal level and investing in infrastructure would greatly improve the current landscape.
“We need to get serious,” a spokesperson for the OHBA said.