Rising housing prices aren't the only thing pushing first-time homebuyers away

financialpost.com:

Housing affordability challenges have been dominating Canada’s political discourse and media channels, but it turns out that it’s not all due to soaring home prices and rents, according to a more nuanced picture painted by Statistics Canada.

Rising prices are undoubtedly a part of the story, but another critical aspect is the growth in incomes and savings bolstered by the pandemic-countering government’s financial support for households and businesses, according to the agency’s newly released 2022 Canadian Housing Survey (CHS) data. This support helped counteract some price pressures, but has not received the same attention.

Much has changed since 2022, so the multifaceted and dynamic nature of affordability burdens before and during the pandemic merits a revisit. These complexities challenge the conventional wisdom that focuses solely on stories of financial hardship, often overlooking the financial windfalls that many have enjoyed due to government largesse.

A household spending more than 30 per cent of their income on shelter costs is considered to be in unaffordable housing, according to Statistics Canada. Yet the data shows that housing affordability burdens remained unchanged before and during the pandemic. In 2022, about 22 per cent of households lived in unaffordable housing, nearly identical to the 21.5 per cent reported in 2018.

Housing affordability burdens are not felt equally between homeowners and renters. In 2022, 33 per cent of renters lived in unaffordable housing, compared to 16.1 per cent of homeowners. This disparity is primarily due to the significant income gap between these two groups. Renters often belong to unique demographic profiles, with a higher proportion of single-income households.

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