House price increases far beyond inflation
Re: “The secret to buying that first house? Learn to do without,” Oct. 31
It is too easy to accumulate debt through borrowing. Even seniors borrow money on their homes by deferring their property taxes. Seniors are bombarded with advertising to take the equity out of their homes and take a vacation. We haven’t learned much from the U.S. mortgage crisis.
Jim Hume’s generation is my parents’ generation, and the struggles were universal in those times. I’m the next generation, which was the generation of consumers, while the present generation is the generation of consumer debt.
My generation did not struggle as our parents did. Things were easier. I made $650 a month in 1972 when we bought our first new house. It cost $22,000 and was modest in size. The cost of the house was about three times my annual income. I was fortunate to have a career with a multinational Canadian company and retired early. We built a modest retirement home which cost seven times my annual income. So affordability of housing has become more difficult in the past 40 years.
Young people today with average incomes can’t possibly purchase a home in the city. The costs of housing have far outpaced incomes.
Governments have had a hands-off approach on consumer debt and now it is getting out of control. It is an issue of governance and no one wants to make the difficult decisions to change the way it is. Even Finance Minister Jim Flaherty, who said he was very concerned about credit card rates and debt, has done nothing. Phil Harrison Comox