Canadian Home Prices “Need” To Be High To Pay For Retirements: PM

Canadian real estate prices have surged in almost every market, with a typical home price doubling in many regions. A median household in major cities like Toronto and Vancouver would need to save over 20 years for just the down payment, more than 3x the historic average. Seems absurd? The outlandish scenario was apparently a part of everyone’s retirement plan, according to Canada’s government. 

That’s according to statements made by Canadian Prime Minister Justin Trudeau in an interview with the Globe & Mail’s City Space podcast. “Housing needs to retain its value… It’s a huge part of people’s potential for retirement and future nest egg,” he explained when discussing affordability. 

The statement is shocking. If the intention was to never lower home prices, what was with the tens of billions spent on improving affordability about? We’ve long argued many of the measures implemented were actually to reinforce prices, not lower them. But let’s look past all of that, and get to the most disturbing part of that sentence. 

Home prices are based on the liquidity of buyers, provided by the next generation. By arguing elevated home prices are required for retirement, they’re effectively arguing that future generations should be billed for the retirement of older households. 

It would make sense if younger generations weren’t already picking up the tab in much more equitable ways. There’s the national pension, the CPP—where the contribution rate has climbed 3x since the 1970s to make up for the fact it underperformed index funds over the past 18 years. There’s also the spending related to Old Age Security (OAS), and the Guaranteed Income Supplement (GIS).  

In addition, virtually all provinces participate in property tax relief for seniors. BC, for example, allows homeowners 55 or older to defer property taxes at a rate below inflation. The program isn’t means-tested either, so the entrepreneurial senior that owns BC’s most expensive property can defer the more than $200k in annual property taxes owned if they choose, with taxpayers picking up the balance of that deferred cost. The generosity of young adults knows no bounds.    

By pretending the burden of home value liquidity is the sole means, they aren’t just ignoring these contributions. They’re compounding the retirement problem for those who don’t own a home into their old age. Policymakers also know the wealth disparity between renters and homeowners exists.  

“The difference between someone who’s rented all their lives versus someone who is a homeowner in terms of the money they have for retirement is massive, and that’s not necessarily always fair,” explained the PM on the podcast. 

However, the problem appears to be framed as something only young adults face. It appears they’re wilfully ignorant of the fact seniors don’t always own a home. National pensions were supposed to create a buffer so we could shed the Victorian Era concept of only land-holding people deserving prosperity. 

While it’s just a few statements, it should be a wakeup to the way policymakers at all levels in Canada view the problem. When it comes to older households, the argument is that elevated home prices are essential for a proper retirement. When it comes to young adults, they’re told they need to get used to the prospect of never owning a home. 

If you’re a young adult pondering what that combination of logic means, be careful asking it in public. Apparently Canada’s national police service considers young adults finding out they’ll never own a home is one of the biggest threats to the country.

42 Comments

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  • Reply
    Ian Brown 1 week ago

    A good argument for why people should always buy real estate, because homeowners are the only ones who vote. That means they’ll always have a government that takes care of the market, rigging it for the upside.

    • Reply
      Trader Jim 1 week ago

      Deferring to my favorite Punwasi quote: “If government’s could control prices, there would never be any asset crashes.”

      Inefficient markets can only be propped up by further inefficiencies. The more inefficient, the harder the correction will be on people. At this point, the OECD sees it taking 40+ years to get back to normal.

      • Reply
        Quan 1 week ago

        They say Millennials are the most educated class in history but the oldest are 44, and most think another 40 years and they’ll finally get a diluted version of what boomers got when they hit 18.

    • Reply
      Daniel Ko 1 week ago

      Ask 2008 America how effective preserving its bubble was? Or more pricely, Japan in the 80s who obliterated their economy for generations.

      Keep in mind Japan wasn’t always a monoculture. It became one after the housing bubble, and policymakers directed the anger into xenophobia, blaming immigrants instead of the bankers that demolished its economy.

    • Reply
      Scott 1 week ago

      Homeowners are the only ones who vote? A good argument could be made for that, but its not the case, live at home 18 year old who get the GST rebate check are happy to vote for whoever is sending the check, as easy buy of votes with the real taxpayers money

      • Reply
        Gusto 1 week ago

        This article is disingenuous AF. cherry picks a single quote, conveniently ignoring the rest of the discussion and contezt out of context..I realize betterdwelling is a ragebait /clickbait rag but articles like this to push a narrative don’t even try to hide it

    • Reply
      Noah 1 week ago

      That is funny , Housing should be always expensive to pay
      for our retirement, and where we will be living in retirement homes
      make a good advertisement. !!!!!!!!!!!!!!

    • Reply
      Dave 1 week ago

      Not really, take a look at what a Royal or CP stock has done over decades they’ve blown away real estate in the long term. I’ve just invested in stocks and though I could buy the block now I choose not to.

  • Reply
    Matt 1 week ago

    Haha. He’s even sloppier than I thought.

    Can you imagine the PM doing an interview with Foch for BD? Heads of central banks and politicians will, but we all know why these chicken shit politicians wouldn’t talk housing with someone that’s not just trying to pump the market.

    • Reply
      M.Bury 1 week ago

      “I don’t get it, why are they confessing?”
      “They’re not confessing, they’re bragging.”

  • Reply
    A matsig 1 week ago

    The Pm is clearly not very bright. His govt used rapidly appreciating house values to cover for what has been the worst decade for gdp in Canada in 90 years. We had housing prices almost double during the COVID recession?
    The problem is when banks and governments create money based on mortgage volumes and dodgey appraisals of collateral, it does one thing? Creates inflation. So we know trudeaus housing and bank regulation has put us here.
    Even worse, his partisan policies meant that only the liberal areas really made money this way. So now that rates went up, either wages have to double, or prices have to fall. Trudeau and Freeland are trying to kick the inevitable crash down the road till another election. They are doing this by blowing billions on some vague supply program, designed to maintain prices for liberals?
    We need prices to come down by 50% in the gta, Ottawa, gvr to fix this. Trudeau doesn’t want that till he figures he can get re elected, or will dump it on the PCs.

  • Reply
    WEF Bros 1 week ago

    You’ll own nothing and be miserable.

  • Reply
    Loonie Canadian 1 week ago

    I’ve thought about this long and hard, and they’re intentionally trying to create a worker society in Canada.

    – Tell Boomers young adults don’t want kids, even thought they can’t afford a second bedroom nevermind kids.

    – Say they need to import immigrants to make up for the lack of kids.

    – Build housing for “families” that are 233sqft, and call it the “goal” for affordable housing.

    The GOAL is to have a workforce that only provides cheap labor and has few other commitments outside of work.

    • Reply
      RW 1 week ago

      Going to be blindsided by media. None of them even mentioned the time the immigration minister outright said international students are “lucrative” and needed for big box store labor.

    • Reply
      Herb Jerb 1 week ago

      Finally, someone else who gets what’s going on.

  • Reply
    WTF 1 week ago

    Housing, Similar to the completely broken and dysfunctional health care system (which the Feds set the rules provinces operate under)

    The political courage to address the issues that will be good for the country doesn’t exist.

  • Reply
    Jacob Sneg 1 week ago

    Justin Trudeau famously said that the budget will balance itself.
    This is another pearl coming from Justin
    Increased real estate prices should be a by-product of a healthy economy.
    Using real estate as a tool brings Canada to a ridiculously high unaffordability, adding to it disastrous municipalities that block the flow of normal construction pace, and provincial rent control policies used as vote-buying tool.
    Municipalities’ property tax increased by 40% in the last 5 years, rent less than 10%.
    Canada’s housing market becomes chaos.

  • Reply
    Effrem 1 week ago

    Both sides played a role in housing , resources and policy. Blaming any government when a simple Google search shows easy qualifications and ultra low rates led to unsustainable purchase power for housing as well as high value items and lifestyle. Banks warned way back but no one listened and now it’s about taking sides

    • Reply
      Gusto 1 week ago

      “own nothing and be happy” Lol..again another quote taken out of context, and used with all the gravitas of hundreds of navel gazing redditors. Read the paper that quote came from and choke on your own cringiness

  • Reply
    Scott 1 week ago

    You better own a home or you are screwed when you are 65 unless you are a Government worker with an indexed generous pension with great benefits. A large cost of a new home is made up of lot fees, development fees, permits, land transfer cost, HST etc. That can easily reach $400K in total Government costs. Hard to see how its possible for prices to come down and it says existing houses are very cheap, since its impossible to replace at current cost…
    Only possible way to reduce price of existing housing is to reduce population by a large amount, eg when 600K English speaking refugees fled Quebec in the 80’s house prices dropped dramatically for 15+ years… Rent much lower and property values a little lower even today..

  • Reply
    Ron Bruce 1 week ago

    Canadian Home Prices “Need” To Be High To Pay For Retirements: We didn’t all work for the Government and receive an uninterruptible income. Over two-thirds of workers worked in the private sector and may never receive an indexed pension. Many workers in the private sector have had numerous jobs, and some businesses/companies no longer exist.
    This is a typical statement made by the PM since he has received a taxpayer cheque all his life. Competing on the global stage isn’t part of the PM’s nor Pierre Poilievre’s knowledge. Who do we elect now? Uniformed “A” or uniformed “B”?

  • Reply
    Prairieboy43 1 week ago

    This disparity is regional. Alberta real estate has barely moved since 2007-2008. $450k home is now $480k in 2024. Whereas Lower Mainland BC, Toronto, Southern Ontario, Montreal have won the lottery. No wonder new immigrants are moving to Alberta. Real estate is Affordable, many west coasters cashing out on there winnings.

  • Reply
    Cameron Petty 1 week ago

    What I have noticed is that the new generations do not seem willing to sacrifice an expensive lifestyle filled with travel, expensive social outings, expensive consumer goods, etc, rather than severely cutting back on these things for awhile and saving that money. I have many examples of young people restricting their discretionary spending and in under ten years buying their first home or other high priced items or living in Mexico and commuting back for camp jobs or, in one case, earning enough in ten years to retire at 32. It seems that people feel entitled to send all their money on luxuries like travel/vacations, unneeded, top of the line products, etc. and then complain that they don’t have the money for a down payment and expect that the rest of society is responsible to help them. I would love to see how such a person actually spends their money. Sacrifices are needed to get ahead, not handouts.

    • Reply
      Timmy O’Toole 1 week ago

      This is common that Canadians see American media and think it’s the same economy. It really isn’t.

      American Millennials have never done better & the US economy per capita has been booming straight time since the Global Financial Crisis. Canadians have been doing worse and worse since 2017. US Millennials are jetting around. Canadian Millennials can barely afford rent.

    • Reply
      Valerie 1 week ago

      Just remember millennials might do this to you when privatized healthcare finally comes. Maybe you’ll figure out how long it takes $5 coffees to add up to real money when you need to pony up 100k for a new hip.

    • Reply
      AllenB 1 week ago

      You are correct; the new generation’s extravagances and lack of priorities are what is holding them back from owning a home of their own.

      The sheer entitlement of insisting on luxuries like three square meals a day is what prevents them from saving for a down payment when instead they need to make some real sacrifices.

      In 10 years, the average salary earner should easily be able to accumulate the down payment for an average one-bedroomed condo in most Canadian markets, all they need do is forgo the luxuries of food and clothing, it is just a matter of priorities.

  • Reply
    Milton Parker 1 week ago

    You can’t have it both ways fearless leader. You just hit future pension plans with a tax grab and now you want to keep prices high for future pension plans? #KeystoneKops

  • Reply
    Craig 1 week ago

    Thanks to badly thought out Government Policies, Canadians who borrowed money and bought overpriced homes have made more money sleeping in their beds and watching television – than working.

    As far as renters and younger generations in Canada are concerned, the Social Contract written above the Gates of Civilization “Hard Work Will Set You Free”… has become as meaningless as “Arbeit Macht Frei,” the popular slogan of Nazi Slave Labour Camps.

    “Give us The Credit Cards and UBI with which to pay them.”

  • Reply
    Valerie 1 week ago

    “where the contribution rate has climbed 3x since the 1970s to make up for the fact it underperformed index funds over the past 18 years. ”

    This is almost completely false. The CPP has still outperformed the interests rates that were assumed for sustainability, although yes higher interests rates may have eventually allowed a premium cut. The reason contribution rates were increased was because CPP was introduced as a pay-as-you-go program that was never sustainable at initial premiums with a stable population. Nothing to do with underperforming, given that premiums for base CPP have not been changed since the CPPIB was established.

    This is a rare case where boomers pretty much paid their own way, so it’s an odd example.

  • Reply
    Keith 1 week ago

    Young adult .. have you save money for down payment ?
    No then u never get 1 even it is now half price for u.

    My first small appt is far away , 300k, me and wife save for 5 years for down payment.

    After we wait for presell opportunity, and I moved 6 times in 14 years. From 300k to 1.2m .

    If house price are over priced, that should be no one buy it, why there are people buying it?

    End up, I found that, is not house pricy, it is Because, I am poor.

    Start saving up.

  • Reply
    Parwinder 1 week ago

    Trudeau is EXTREMELY intelligent and is making me a rich man!

  • Reply
    Dorothy Wakefield 1 week ago

    Trudeau trying to be divisive again blaming this on retirees?
    If house prices fall what would happen to people with higher mortgages whose houses may be worth much less that when they took their mortgage out….banks wouldnt renew their mortgages. This would cause another housing crisis. The government brought in too many people too fast…supply of houses not enough for the demand.
    Trudeau Never accepts the blame for his governments errors…instead he blames it on another groyp or Harper Lol!

  • Reply
    Ander Snorok 1 week ago

    Most people are content to just believe everything they’re told. King Trudeau learned this from his father and is applying that recipe. Been working for a decade in his favor. No reason to thing it will stop.

  • Reply
    Jared Webster 1 week ago

    It’s amazing how we seem to continually get to these point where the great PM Trudeau has to decide between the narrative and tipping his hand to show what he really cares about, and it always shows that his “helping the middle class and those trying to join it” has always been BS.

    The only way to keep house prices high and increase affordability is to increase wages, which devalues the currency and increases inflation and makes everyone have less money (except the rich who can invest to beat inflation). So in other words we are about to see more spending and larger deficits, higher inflation and interest rates just so you can pay more than you should to buy a house with an inflated value, so that the rich can retire as the young person close up the tab!

    Way to go Trudeau!

    • Reply
      Frank 3 days ago

      Let’s not forget who is set to inherit those riches . Who is really closing the tab?

  • Reply
    BP 1 week ago

    Over half federal MPs are landlords/RE investors. You can look up the info of government workers investments on readthemaple website.
    This is complete conflict of interest. Federal public workers should not be able to invest in certain areas that they can keep propped up from their own policies/regulations, especially when it aids them in writing off their own taxes.

  • Reply
    Harold Sole 7 days ago

    One side of his face says we need our homes for retirement. The othe side is taxing the you know what out of our capitol gains on said house. Trudeau is nothing short of a 2 faces liar not unlike all liberals.

  • Reply
    Frank 3 days ago

    And yet, more divisiveness by the PM. Youngers should remember, they will inherit much of the boomers retirement funds from sale of their Parents / Grandparents home when they pass away. Sure there will be the haves and have nots , home prices are high but if you buy an average home for $700k, and have $300k down from an inheritance and a $400k mortgage, suddenly the doom and gloom is gone. The instant gratification was never a thing years ago. The ‘ I want it now” crowd needs to bide their time as those before them have. The government is biding theirs, they know what awaits.

  • Reply
    Frank 3 days ago

    Youngers should remember, they will inherit much of the boomers retirement funds from sale of their Parents / Grandparents home when they pass away. Sure there will be the haves and have nots , home prices are high but if you buy an average home for $700k, and have $300k down from an inheritance and a $400k mortgage, suddenly the doom and gloom is gone. The instant gratification was never a thing years ago. The I want it now crowd needs to bide their time as those before them have. The government is biding theirs, they know what awaits.

  • Reply
    Dave 3 days ago

    Youngers should remember, they will inherit much of the boomers retirement funds from sale of their Parents / Grandparents home when they pass away. Sure there will be the haves and have nots , home prices are high but if you buy an average home for $700k, and have $300k down from an inheritance and a $400k mortgage, suddenly the doom and gloom is gone. The instant gratification was never a thing years ago. The ‘ I want it now” crowd needs to bide their time as those before them have. The government is biding theirs, they know what awaits.

    • Reply
      Terry 2 days ago

      You should probably remember that if they plan is for homeowners to withdraw equity to fund their retirement, the plan is for younger households to not have any money.

      Even if that weren’t the case, they’re going to spend their lives funding this system so they can settle down and have kids at 65? 70?

    • Reply
      Valerie 2 days ago

      Wanting to buy a house on your own income is not “instant gratification,” it’s an extremely basic part of a society with class mobility. It’s not just that young people cannot buy right away, but that old people for some reason are offended that they will recognize out loud that they do not have a path to buying a home that costs 7 or 8 times their income without relying on others.

      Those before them did not have to wait to inherit, and it’s completely shameful that they were born into a society where people could make it on their own and are now both happy to destroy that opportunity and scold young people for expecting it.

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