A noxious blend of elevated real estate prices and growing interest rates has continuously blocked a significant portion of Canada’s young adults from home ownership, and a new Point2 Homes report has found that down payment represents a formidable barrier to entry for this generation.
The study, which polled 9,000 people about their buying intentions and saving habits, used income data and average housing prices in the 100 largest cities nationwide as the baseline for analysis.
Point2 Homes found that 66% of Canadian millennials have expressed a desire to buy a home within a year, but 30% of the cohort said that they found managing the down payment particularly troublesome as they had less than $10,000 in savings. Crucially, 10% of those polled stated that they had no savings whatsoever.
These stresses are forcing young adults to put off “family creation, both in terms of choosing a partner or spouse and in terms of adding children to a household. Homeownership is often spurred on by family creation events. Therefore, we are seeing delayed interest in homeownership,” York University associate professor of real estate Avis Devine said in the report.
The phenomenon is especially apparent in the hottest markets, where millennial home owners need to allot one-fifth of their incomes to servicing costs for no less than a decade.