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Home ownership remains a priority for a large majority of Canadian millennials and Generation Z, but only about half believe it’s an achievable goal, a new survey from Royal LePage has found.
According to a survey of 2,280 Canadians conducted by Leger on behalf of Royal LePage, 84 per cent of those between the ages of 18 and 38 say they believe that home ownership is a worthwhile investment. For those who do not own a primary residence, 74 per cent say that owning a home is a priority.
While most young Canadians have their eyes set on home ownership, being able to actually purchase a home may be a challenge, and one that survey respondents are certainly aware of. Housing affordability remains a significant challenge in Canada, as a shortage of housing supply and surging population growth combined with higher interest rates have made it more difficult for many to purchase a home.
The survey found that just over half of the Gen Z and millennial respondents (54 per cent) believe home ownership is achievable, while 26 per cent say they are unsure and 20 per cent say it is not achievable for them at all.
“The youngest cohort of homebuyers in Canada has no shortage of barriers on their path to ownership. Though the cost of borrowing has begun to come down, chronic supply shortages have kept housing prices from dropping, even as demand softened under the weight of high interest rates,” Phil Soper, president and CEO of Royal LePage, said in a statement.
“Despite these hurdles, the next generation of homebuyers remains committed to their pursuit of owning real estate, and are remarkably optimistic that they can make their dream a reality.”
For those looking at buying a home, 40 per cent say they plan to purchase one within the next five to 10 years. With lower borrowing costs on the rise as the Bank of Canada continues to loosen monetary policy, 18 per cent say they plan on purchasing a home in the next three years, while 13 per cent plan to buy in the next three to five years. Another 25 per cent say they intend to purchase a home more than a decade from now.
Lifestyle changes
In order to afford a home, younger Canadians are easing off discretionary spending as well as delaying other major purchases and life decisions. The survey found that 27 per cent of prospective young buyers have stopped travelling in order to save for a home, while 21 per cent have delayed or opted out of smaller – but still significant – purchases, such as buying a car. Another 21 per cent have delayed moving out of their parents’ home; 17 per cent have delayed or eliminated living on their own; 14 per cent have delayed or eliminated the prospect of starting a family, and 11 per cent have delayed or eliminated saving for retirement. (Respondents were able to select more than one response.)
“In pursuit of home ownership, many young people are not only pausing small daily indulgences but also making compromises that impact their long-term financial stability. These include sacrifices like delaying education and retirement savings, and putting off other major investments,” Soper said.
“If policymakers needed yet another example of the impact of our nation’s chronic housing supply crisis on the financial security and well-being of young people, this is it.”
A separate survey conducted by RBC reflects similar findings. According to an RBC survey released on Wednesday, 71 per cent of prospective first-time homebuyers under the age of 30 believe home ownership will be an important part of their retirement plan. In fact, home ownership is a key part of the five-year plans for 40 per cent of respondents, outranking marriage (24 per cent), travel (30 per cent) and purchasing a car (33 per cent.) The RBC poll also found that 78 per cent of single and unmarried first-time homebuyers under the age of 30 are prioritizing saving for a mortgage instead of having a more lavish wedding.
The Royal LePage survey was conducted between July 22 and July 31, using representative sampling across all provinces according to 2021 census figures. While no margin of error can be associated with a web panel survey, Royal LePage notes that for comparative purposes, a similar-sized survey would have a margin of error of +/- two per cent, 19 times out of 20.
Alicja Siekierska is a senior reporter at Yahoo Finance Canada. Follow her on Twitter @alicjawithaj.
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