A recent report out of Canada could also foretell an ominous outlook for young people not only in that cosmopolitan nation but for us in Barbados.
The Toronto Star, in an article last year outlined just how challenging it has become for Canadians to become homeowners as housing prices have shot through the roof.
Statistics from the Canadian market showed that since February 2020, the average cost of a home jumped by approximately 50 percent from around half of a million Canadian dollars.
Saving for the recommended 20 percent down payment has become extremely prohibitive for three out of every four Canadians aspiring to own a home.
Rob Richards, co-founder and chief executive officer of the real estate company Key said the rising cost of homes has outpaced wages, making it near impossible for Canadians to get ahead. In addition, he pointed out that with rising interest rates and inflation, the “affordability gap is tougher than ever to close”.
What was more startling about this circumstance was the information derived from a Home Ownership in Canada study which revealed that a staggering 96 percent of Canadians believe home ownership was a real problem in that country and nine out of ten Canadians assessed they will probably never be in a position to own a home.
In such a vast country that is today encouraging people from all over the world to migrate there to boost its population, it is stunning that so many of its citizens are so despondent about something as fundamental as owning a home.
The survey of approximately 2000 Canadian adults revealed that almost half (45 percent) are renting or living with relatives, while the other half were home owners.
Richards, the co-founder of Key, has come up with an innovative programme that helps to move renters who aspire to ownership to eventually achieve their dream by contributing as little as 2.5 percent of the value of their home, without needing to qualify for a mortgage.
“We created Key to make the dream of homeownership a reality for people. The reality is, this crisis is a complex problem that has no single silver bullet – it requires partnership and innovation to build new pathways to homeownership,” he stated in the publication.
Here in Barbados, we certainly have a crisis of homeownership, but it is almost exclusively in the low and middle-income market.
The number of people seeking low income housing is infamously long as outlined over the years by the National Housing Corporation (NHC).
It is almost impossible to secure land for rent in 2023 as landowners are reticent to enter such arrangements because of the lengthy legal process required when the landowner wants to retake possession of the property and the concomitant displacement of families when this occurs.
The island has also witnessed a tremendous increase in the number of people taking matters into their own hands and squatting on government land and privately owned properties.
Successive administrations have tried to fill the housing gap among low and some middle-income earners, but the problem still remains.
Contrast this against the hot real estate market among high-income earners and foreigners with deep pockets who are snapping up million-dollar properties on the West Coast as if they were included in the wing-dings special.
Over the weekend we learned from one of the island’s leading real estate companies that demand for properties on the West Coast of St James and St Peter were going fast and for way above the asking prices. The average closing prices are hovering in excess of $5 million.
“Interest from ultra-high net worth individuals seeking to purchase property in Barbados has been at one of the highest levels in the firm’s history over the last three years,” reported Betty Cathrow and Emma Hutson of Terra Caribbean.
The Barbados economy certainly needs the foreign and investment dollars, but we suggest the need for monitoring to ensure Barbadians are not being priced out of ownership in their homeland.