Millennials are Generation Rent.
We are pretty sure this isn’t the first time you’ve heard of this. And it’s true, Millennials aren’t becoming home owners as quickly as the previous generation. One major reason: They just cannot afford it.
Canada Vs Singapore
In a collaboration between Zoocasa and Stacked Homes, we took a look at how long it would take Canadian millennials to save for a down payment for a home in Canada versus Singapore. Now, Canada and Singapore might not traditionally be two countries that you would think about when it comes to making any form of comparison. After all, at 9.985 million square kilometres, Canada comes in at a whopping 13,839 times the size of Singapore (721.5 square kilometres). Nevertheless you might be surprised at the similarities when it comes to housing affordability in both markets (Our currency is as good as equal).
As you might already know, it takes on average 5- 27 years to save for a down payment in Toronto. If 27 years strikes you as a long time to save for a down payment, it is really down to the poor savings rate amongst Canadians. According to Trading Economics, Canadians only save 4.4 per cent of their income (as of Sept 2018, this is now down to 1.1%) every month on average. If we are speaking strictly about Toronto itself, this means that it would take 21 years to save for a down payment. Now, if we look at a more reasonable savings rate of 20% of income, this shortens to a much more positive five years!
So how long does it take to save in Singapore?
Let us now turn our attention to Singapore.
No doubt because Singapore is so much smaller, land prices are much more expensive. Singapore does have public housing (HDB) as an option for Millennial couples to purchase. And while it is true that majority of the locals will purchase an HDB as it is subsidized by the Government, this does come at a price of a waiting time of three to four years. So instead in this comparison, we shall be looking at an average three-bedroom private apartment in Singapore.
In 2018, the average price per square foot paid was SGD$1,443 in Singapore. Taking an average three-bedroom sized private apartment of 900 square feet results in a total of SGD$1,298,700. At the time of writing, 1 SGD is equivalent to 0.99 CAD so this translates to an average price of $1,279,440. In Singapore, the minimum down payment is 20 per cent in cash so the amount we are looking at here would be $255,888.
The median income for a Millennial couple in Toronto is currently at $67,880. This means that the time it would take for a Millennial couple in Canada to save up the down payment for an average three-bedroom priced at $1,279,440 in Singapore would be a staggering 85 years!If we were to look at a more optimistic savings rate of 20 per cent, this comes down to a much better figure of 19 years. Although if you ask us, that is still a really long time.
With all that said, Millennials in Canada who are looking to buy their first home, do not be too discouraged as there are cities out there with much worse housing situations! Housing prices may be high, but sometimes it does take some careful planning and forced savings to be able to reach your housing goals.
Toronto data is provided by Zoocasa and sourced from the Toronto Real Estate Board. Singapore data is proved by Stacked Homes. Average price per square foot from Singapore was based on the year 2018 figures. Values were converted to CAD at an exchange rate of $1 SGD to $0.99 CAD.
About Stacked Homes
Stacked Homes is a platform that allows people to buy, sell and rent homes in Singapore. We offer unbiased housing advice through our blog and comprehensive reviews about property in Singapore.