Two of our biggest cities are an affordability trap for young adults.

Without six-figure incomes or well-off parents, anyone in their 20s and 30s has to question whether they have a future in Vancouver and Toronto that includes home ownership.

You can put yourself on a path toward financial success in life with your choice of postsecondary education, your career decisions, and your spending, saving and investing habits. It’s time to add your choice of city to the mix.

Vancouver is geographically awesome and chill, while Toronto is a vibrant, diverse economic powerhouse. If you can afford them, they’re great places to live. If not, living in these two cities in your career-building years could slowly degrade your financial health.

It’s a challenge to escape the gravitational pull of these cities. I grew up in Toronto and lived there for 32 years until moving with my family to Ottawa. I get back to Toronto all the time to see friends and family who are lifelong residents of the Greater Toronto Area and Hamilton.

Still, internal migration patterns within Canada show how people are rebelling against the high cost of living in Toronto and nearby cities. According to Statistics Canada’s interprovincial migration dashboard, Ontario had a negative net rate of migration in 2021-22 (more people leaving than arriving). Among provinces, only Manitoba and Saskatchewan had higher rates of net migration out of the province.

The Atlantic provinces did well in attracting Canadians from other provinces, and so did Alberta. The Business Council of Alberta noted a few months ago that more Canadians moved to Alberta than any other province in the first quarter of the year.

Housing costs, including both renting and owning, are where you see the economic benefits of living outside Toronto or Vancouver most clearly. says the most expensive rental markets in Canada are Vancouver, with an average one-bedroom rental at $2,590, and Toronto at $2,474. These numbers are based on a survey of the broad rental market, including rental apartments, condos, houses and townhouses.

Those rents look particularly high in the context of average incomes in those cities for people aged 25 to 34. Statistics Canada’s most recent numbers show the average for that cohort is $51,600 for Toronto and $50,500 for Vancouver.

There was once a guideline that rent shouldn’t use up more than 30 per cent of your gross pay. The 30-per-cent rule as applied to Toronto caps monthly rental costs at $1,290 for people who make the average income. Only at close to double the average income for young people does Toronto’s actual average rental in September fall into line with the 30-per-cent rule.

Affordable rent gives you the financial space to start a Plan B fund for emergencies such as job loss or income interruption, start investing for long-term goals, spend some money on yourself and save for a home down payment. But in Toronto and Vancouver, affordable rentals are nearly as rare as well-played hockey games by their respective NHL franchises.

Plan on saving a long time for a down payment if you live in Toronto and Vancouver. The average resale house price in Vancouver was $1,155,300 in September, up 3.9 per cent from a year earlier. The minimum down payment for houses costing more than $1-million is 20 per cent, which for Vancouver’s average home amounts to $231,060.

For that much, you can come close to the whole cost of average resale houses in several cities in Eastern Canada or cover more than half the cost of homes in Edmonton and Winnipeg.

The wealth of Toronto and Vancouver is obvious if you spend time in those cities, but incomes there for young adults are right in line with the national average for 25- to 34-year-olds, which was $50,200 in 2020. Cities that jump out for higher-than-average incomes combined with cheaper housing are Quebec City, Ottawa-Gatineau, Calgary and Edmonton.

Affordability in Toronto and Vancouver could improve somewhat if governments succeeded in getting lots more homes built, or if inflation persists and interest rises enough to crash the housing market. The more likely outcome is that prices fall a bit more, then stabilize at levels that keep many young adults in the rental market. To own a home and achieve financial balance in life, think about moving.

The Globe and Mail, November 3, 2022