Zoocasa
Sold Prices
Mortgage Calculator
Map
Market Insights
  • Blog Home
  • For Buyers
  • For Sellers
  • Real Estate News
  • Mortgage News in Canada
  • Free Guides (PDF)
  • Real Estate Infographics
Zoocasa
  • Blog Home
  • For Buyers
  • For Sellers
  • Real Estate News
  • Mortgage News in Canada
  • Free Guides (PDF)
  • Real Estate Infographics
Home Buying a Home

The Generation Gap: Buying a Home Today vs. 30 Years Ago

Zoocasa by Zoocasa
February 17, 2023
in Buying a Home
Reading Time: 5 mins read
Skyline of condo apartments.
Share2
Tweet
Share
2 Shares

Is buying a home easier or harder than it was 30 years ago? That debate – and the answer – varies depending on the historical factors considered and your own financial position and lifestyle preference. 

We explore how times have changed by looking at prices, demographics, mortgage rates, and house type and location.

Enjoying our content? Subscribe to our free weekly newsletter to get Canadian real estate market insights, news, and reports straight to your inbox.

Prices

Then: A long slump

Going into the 1990s, Canada’s housing market seemed robust, but then the economy slid and prices stagnated for most of the decade. In Toronto, prices peaked at $254,197 in 1989 and didn’t reach that level again for more than 12 years.

Statistics from the Canadian Real Estate Association show that the national average price was $142,091 in 1990 and $154,768 by 1997 – an 8% increase that, according to Financial Post columnist Garry Marr, is “paltry by today’s standards.”  Even two years later, in 1999, the national average price was still just $158,000.

Now: Prices continue to adjust to the post-pandemic market

The current housing landscape is still in a period of recovery after staggering price gains during the pandemic followed by rapid interest rate growth that restricted buying power. The national average price for a home sold in December 2022 was $626,316, which is a 12% drop from December 2021’s average home price of $711,579. One of the overriding themes of 2022 was the lack of inventory available for potential buyers.

Nonetheless, there have been some areas that have experienced monthly gains in prices. Saint John’s average price increased by 6.5% to $284,899. Calgary’s price also grew by  2.7% to $518,341.

Although it is true people are making more money than in the past, incomes have not kept pace with prices. A recent report shows that there are only five major cities in Canada that provide housing that is affordable for families with a single median income earner. 

  • Related: The Most Expensive and Affordable Cities of 2022

Demographics

Then: Fewer first-time home buyers

A key factor in Canada’s last major housing market crisis – which set the 1990s up for stagnation – was the unusually low number of people in the 25-34 age group. The lack of young people meant fewer first-time home buyers to drive the market forward.

Now: First-time buyers and investors dominate the market

By comparison, there are many more people currently in the 25-34 age group waiting on the sidelines for prices to drop further to afford to purchase their first homes. As interest rates have made housing less affordable in Canada, many investors that had the funds to scoop up properties even with the higher rates have been quite active in Canadian markets.

  • Related: Will Canadian Housing Affordability Finally Improve? 8 New Federal Housing Initiatives

Mortgage Rates

Then: High mortgage rates

At the beginning of the 1990s, the interest on a 5-year fixed mortgage rate – the most popular rate in Canada – was about 14%. Rates gradually declined but jumped over the 10% mark in 1995 until permanently dropping, thanks in part to new Bank of Canada policies.

  • Tool: Use a mortgage calculator to help determine what you qualify for

Now: Lower mortgage rates

Over the past decade, interest rates on mortgages have been at historical lows, hovering between the 2-5% range on average, which is less than half what they were 20 years ago. This substantial difference has made buying a home a more attractive and feasible option.

While the Bank of Canada (BoC) has been steadily raising interest rates the past year, in comparison to 30 years ago, today’s rates are still highly competitive.

  • Related: New Year, Same Rate Hikes: The 8th Increase in 10 Months

House Type & Location

Then: Suburban expansion

Data from the 2001 Census suggest the majority of dwellings built in the 1990s were constructed in “peripheral neighbourhoods” – metropolitan suburbs with low population density. Housing starts lagged in the first few years of the decade, but then the construction of single-detached homes increased until the early 2000s, making up the bulk of construction projects.   

Now: Condo boom

The influx of first time home buyers and their preference for an urban lifestyle is accelerating condo development. Of the hundreds of high-rise buildings under construction, the vast majority are condos – and the square footage is getting smaller.

Those seeking affordable detached family homes must look further afield. That’s why the Greater Toronto and Greater Vancouver areas continue to sprawl, and commutes are getting longer.

Conclusion

There’s no question the housing environment and trends of today have changed drastically since the 1990s – for better and for worse. Only time will tell what the future market brings, but it’s always good to know a bit of history for context and understand the different contributing factors.

Published: October 6, 2014
Last updated: February 17, 2023

Previous Post

A Slow Start for Edmonton Real Estate Creates Opportunities for Buyers

Next Post

Home Decor Trends: 4 Interior Design Ideas to Try in 2023

Zoocasa

Zoocasa

Zoocasa is an award-winning prop-tech company and wholly owned subsidiary of eXp Realty Inc. LLC. Zoocasa uses data and technology to deliver an intelligent, end-to-end real estate experience. Zoocasa’s insights and suite of digital tools, combined with the market expertise of its dedicated agents and team allows Zoocasa to set a new standard for full-service real estate. A 4-time winner of both the Financial Times' Fastest Growing Companies in the Americas and the Top Growing Companies in Canada by the Globe and Mail, Zoocasa continues to innovate on the home buying, selling and search experience online.

Related Posts

Buying a Home

Gardeners’ Paradise: 7 Dream Homes Where Green Thumbs Thrive

May 23, 2025
A yellow house by the water, next to a wooden dock, surrounded by a serene landscape.
Buying a Home

7 Small Towns in Newfoundland That Are Stealing the Spotlight from Big Cities

May 22, 2025
British Columbia

When the Street Name Steals the Show: 5 of Canada’s Funniest Home Listings

May 20, 2025

Blog Search

No Result
View All Result

Newsletter Sign-up

Join a community of 130,000+ subscribers. Don't miss important real estate news, market data, and buying and selling tips.

Recent Articles

Regina Restaurants: A Curated Guide to the Best Eats in the Queen City

May 24, 2025

Gardeners’ Paradise: 7 Dream Homes Where Green Thumbs Thrive

May 23, 2025
A yellow house by the water, next to a wooden dock, surrounded by a serene landscape.

7 Small Towns in Newfoundland That Are Stealing the Spotlight from Big Cities

May 22, 2025
young family playing soccer with child

The City of Red Deer is Calling, a 90-Minute Drive from the Rush

May 22, 2025

Featured Listings

Gardeners’ Paradise: 7 Dream Homes Where Green Thumbs Thrive

May 23, 2025

Dream Homes with Breathtaking Views in the U.S.

February 11, 2025
A family looking at a house.

Deals of the Month: Ontario Homes with Recent Price Reductions

November 12, 2024

Slopeside Living: 9 Ontario Homes Near Ski Hills and Resorts

October 11, 2024
first-time home buyer programs and rebates

Social Media

250 The Esplanade Suite 408 Toronto, ON M5A 4J5

Stay Connected

  • Blog Home
  • For Buyers
  • For Sellers
  • Real Estate News
  • Mortgage News in Canada
  • Free Guides (PDF)
  • Real Estate Infographics
No Result
View All Result

Zoocasa © 2007–2022. The trademarks MLS®, Multiple Listing Service® and the associated logos are owned by The Canadian Real Estate Association (CREA) and identify the quality of services provided by real estate professionals who are members of CREA.