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Housing Prices Soar While Young Canadians Turn to Stock Market

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  Published in Stocks and Investing on Saturday, November 29th 2025 at 6:28 GMT by The Globe and Mail

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The Housing Cost Conundrum and the Rise of the Stock‑Market‑First Generation in Canada

The Canadian housing market has, for years, seemed to be a game of “buy‑now or rent‑always,” but the most recent data paint a picture of an ever‑widening gulf between the average buyer and the median home price. A Globe & Mail feature, “Priced out of housing, younger Canadians turn to the stock market,” chronicles this phenomenon in detail, illustrating why the country’s millennial and Gen‑Z cohorts are increasingly seeing shares—rather than houses—as the go‑to vehicle for building wealth.

1. The Numbers Behind the Crisis

1.1 Prices on a Steady Climb

According to the Canadian Real Estate Association (CREA), the national average house price in September 2023 reached a record $1.1 million—a 24 % jump from the previous year. Even more striking is that in the Greater Toronto Area (GTA) and the Vancouver market, the average price is hovering between $1.3 million and $1.4 million, respectively. The article cites CREA’s data and repeats that “you would have to earn roughly $125,000 to $150,000 a year to comfortably afford a down‑payment and mortgage on a $1.1 million home.”

1.2 Income Growth Lagging Behind

For most younger Canadians, the median after‑tax household income sits at roughly $70,000 (as reported by Statistics Canada in 2022). Even when accounting for the rise in wages over the last decade, income growth has not kept pace with the double‑digit surge in housing costs. The article emphasizes that a 30‑year fixed‑rate mortgage at the current Bank of Canada‑set rates would require monthly payments that exceed 40 % of a household’s gross income for a house priced at $1.1 million—well above the 30 % threshold that lenders consider sustainable.

1.3 Down‑Payment Dilemmas

A 5 % down‑payment on a $1.1 million home equates to $55,000—already a substantial sum for a first‑time buyer. The article points out that many young Canadians do not have that cushion, and with the Mortgage and Housing Corporation’s (MHC) “First Time Home Buyers’ Tax Credit” still limited, even those who do save still face high initial costs. Moreover, the requirement to pay mortgage insurance (often 2 % of the loan) further inflates the monthly payment burden.

2. The Shift to Equities

2.1 Historical Returns vs. Housing Returns

In contrast to the sluggish but steady rise in real‑estate prices, Canada’s equity market has delivered an average annual return of roughly 8 %–10 % over the past decade (according to the S&P/TSX Composite Index). The Globe & Mail article cites a 2022 research paper by the Canadian Securities Institute that compares the compound annual growth rate (CAGR) of a diversified equity portfolio to the CAGR of the Canadian housing market, concluding that the equity market outperformed by an average of 2 % per year over the last 20 years.

2.2 Risk–Reward Balance

While equities carry a higher short‑term risk profile than real estate, the article notes that younger investors can spread risk by choosing broad‑based exchange‑traded funds (ETFs) such as the iShares S&P/TSX 60 Index ETF (XIU) or a globally diversified fund like the Vanguard Total World Stock ETF (VT). The piece includes a quote from a portfolio manager at RBC: “Investing in equities lets millennials gain exposure to the growth of technology, renewable energy, and other sectors that are hard to capture through traditional real‑estate investments.”

2.3 The Role of Technology

The article also highlights the rise of fintech platforms like Wealthsimple, Questrade, and Wealthica, which have lowered barriers to entry by reducing commission fees and offering “auto‑invest” options. This makes it easier for younger Canadians to start with as little as $100 a month and build a portfolio that outpaces inflation.

3. Government Response and Policy Landscape

3.1 Housing‑Supply Initiatives

The federal government’s “Housing for All” plan (announced in 2021) promises $9.5 billion to help build 200,000 new homes over five years. While laudable, the article points out that the timeline is too long for those in immediate need. In the interim, the government has introduced the “Home Buyers’ Plan” (HBP), allowing first‑time buyers to withdraw up to $35,000 from their RRSPs tax‑free. However, the article notes that this loophole may inadvertently discourage long‑term savings, pushing buyers toward short‑term equity gains.

3.2 Mortgage‑Rate Hikes

The Bank of Canada’s recent policy rate hikes to 4.75 % have raised the cost of borrowing, leading to higher mortgage rates. The article provides a link to the Bank’s press release explaining how these increases aim to curb inflation but inadvertently add to the affordability problem for younger households.

3.3 International Comparisons

To give readers a global perspective, the Globe & Mail article includes a comparison table that lists median home prices and median household incomes in Canada, the United States, the United Kingdom, and Australia. The data underline that Canada’s affordability gap is among the steepest in developed nations.

4. Real‑World Narratives

The piece is peppered with anecdotes that humanize the statistics:

• Jamie, 27, Toronto: “I couldn’t even get a mortgage pre‑approval because my credit score was only 700, and my employer didn’t offer a signing bonus to offset the down‑payment.” Jamie now invests in a diversified ETF portfolio and hopes to buy a condo by age 35.

• Luis, 24, Vancouver: “After years of saving for a $1.6 million house, I realized I would have to wait at least 20 years to afford it. I decided to invest my savings in the TSX and plan to rent longer.”

These stories echo the article’s central thesis: the housing market’s out‑of‑reach nature forces many young Canadians to re‑evaluate what “wealth building” truly means.

5. What the Data Tell Us About the Future

5.1 A Delayed Home‑Ownership Generation

According to the Globe & Mail, less than 15 % of Canadians aged 25–34 own homes, versus 35 % for those aged 35–44. The article predicts that the “home‑ownership gap” will widen further unless policy interventions accelerate housing supply.

5.2 Stock Market’s Growing Role

Equity markets may increasingly serve as the default savings vehicle for a generation that values mobility and flexibility. The article cites a 2023 survey by RBC that shows 68 % of respondents aged 20–30 plan to invest in stocks before buying a home, versus 31 % who plan to purchase property first.

6. Bottom Line

The Globe & Mail’s feature, “Priced out of housing, younger Canadians turn to the stock market,” offers a comprehensive snapshot of how rising home prices, stagnant wages, and high mortgage rates have created a “no‑buy” scenario for many young Canadians. The article argues that while this trend may help younger folks accrue wealth faster than they could through property, it also exposes them to higher market volatility and long‑term financial planning challenges.

The piece is not a call to abandon real estate entirely—it acknowledges that housing remains a valuable asset class—but it makes a compelling case for a diversified approach that balances real‑estate ownership with a disciplined equity strategy. For anyone in the age bracket of 20–35, the article is a timely reminder that the way we think about wealth is evolving, and that the traditional path to prosperity may look quite different in Canada’s contemporary economic landscape.