A house that sold in Vancouver. Photo by Darryl Dyck for the Globe and Mail

The average price of a detached single-family home in Vancouver sells for upwards of $1 million – it’s safe to say that housing prices in Vancouver are crazy. An article by the Globe and Mail titled “How a housing market decline could put retirement savings at risk” elaborates on the effects a crash would have on the retirement plans of Canadians nearing that point in their lives. Many Canadians have the majority of their savings invested in their real estate. For them, an increase in interest rates would add additional costs onto mortgage payments and have a large impact on plans for retirement.

This topic hits close to home because the demographic that this article speaks of includes my parents. Having purchased a home in Coquitlam only two years ago, my parents pay a large mortgage and will rely on high housing prices when they sell our home. Our house is their primary source of retirement income. On the other hand, as a student hoping to graduate and enter the workforce in the next couple of years, the housing market is less than desirable. With a decent downtown single-room apartment renting out for a minimum of $1,000/month, renting accommodation is proving to be neither sustainable nor economically smart. For 20- and 30-somethings in the process of moving out and renting or purchasing housing in the city, a crash in the housing market may be even welcome. Analysts have been predicting a housing market crash for the past decade, yet prices have continued to skyrocket. As long as banks continue to lend money at low interest rates, people will continue to buy. It’s a difficult problem whose answer has yet to be found.