Young Canadians optimistic about home ownership despite rising prices
Posted March 9, 2022 9:51 pm.
Last Updated March 9, 2022 11:57 pm.
Despite sky-high home prices in major Canadian cities, Generation Z has a positive outlook on their prospects for homeownership — with one in three saying they expect to make a purchase in the next five years.
A new report from Sotheby’s Realty International Canada found those between 18 and 28 years old, many of whom have recently entered the workforce, see real estate as an investment that will help fincnce their retirement. Eighty-three per cent of those surveyed saw purchasing a home as key to their long-term financial stability, with 71 per cent saying they think real estate will perform as well or better than other investments.
“Gen Z views owning a home as one of the more secure ways of attaining wealth within Canada, especially at a time when the financial institutions might have a little more instability. Gen Zs view homeownership as a very stable path to accumulating wealth now and into the future,” said President and CEO Don Kottick.
But how are they planning to finance their purchase? Kottick says that’s one thing the report endeavoured to find out.
It found that a significant number say they will be relying on employment income and reducing expenses. Fifty-one percent plan to get a higher-paying full-time job, and 41 per cent plan to get a second job. Cutting personal spending was a strategy favoured by 42 per cent, while 28 per cent said they plan to delay having a child.
“They were going to basically have their personal finances as the source of their financing, which which was quite interesting,” Kottick said.
“So that was something that we found that was very unique.”
Those relying on family were in the minority, with 25 per cent saying they were planning to use a financial gift, and 16 per cent expecting an inheritance. Co-ownership with relatives, friends, or others is something being anticipated by 37 per cent.
While those surveyed live in Vancouver, Calgary, Toronto and Montreal — Kottick says they may not be planning to stay in the core of those urban centres.
“We have a lot of people that are going to buy where they can afford to buy,” he said.
“Affordability is going to be an ongoing issue and sometimes to find something affordable, you might have to leave some of the urban areas and go to the suburban and even to the rural areas. The ability to work from home now, which has become much more acceptable, allows buyers to go farther afield.”
What people are expecting to pay varies depending on where they live. Sixteen per cent of those in Toronto, and fourteen percent in Vancouver expcet their first home to have a price tag of $1 million or more. In Calgary and Montreal, that drops to four per cent.
Kottick says markets that offer affordable housing prices, lower costs of living and a wide-range of job opportunities — such as Calgary and Montreal — will have an advantage when it comes to attracting and retaining young buyers national housing prices continue to climb.
With files from OMNI News