Young Canadians are still striving to enter the housing market even as affordability barriers persist, a new report from Royal LePage suggests.
The survey released Tuesday gauged how young Canadians — broadly including those born from 1986 to 2006 — feel about their homeownership prospects.
A little over half (54 per cent) of those in that age group said they believe homeownership is an achievable goal. One in five, however, said they don’t think it’s in the cards for them.
Despite recent interest rate cuts from the Bank of Canada, borrowing costs are still relatively high in Canada. That’s been an obstacle for would-be buyers hoping to qualify for a mortgage to break into the housing market, particularly as home prices have held firm in many parts of the country.
More than half (52 per cent) of those surveyed said they don’t have enough saved for a down payment and probably never will.
The Royal LePage report is based on Hill & Knowlton polling via Leger in late July, just before and after the Bank of Canada’s second interest rate cut of the cycle. The findings align closely with Ipsos polling conducted exclusively for Global News after the initial cut in June, which found 45 per cent of respondents said that they won’t be able to afford a home no matter how much interest rates drop.
But the Royal LePage report shows that despite the seemingly daunting task, many Canadians are still taking steps to hit that goal.
Some 45 per cent of respondents said they’re saving diligently and feel they’ll have enough put aside in the near future to afford a home. And 31 per cent said they have confidence in their career trajectory giving them enough of an income boost in the years ahead to make the purchase.
Some 42 per cent said they’re focusing on paying off bills and loans to maintain a quality credit score, and more than a third (34 per cent) are paring back discretionary spending.
Other plans and milestones are also taking a backseat to homeownership hopes for many. Young would-be buyers said they’re delaying or forgoing travel plans (27 per cent), living on their own (17 per cent), starting a family (14 per cent) and saving for retirement (11 per cent).
“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,” said Royal LePage CEO Phil Soper in a statement.
“If policy makers 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.”
The Liberal government has unveiled proposals in recent weeks aimed at lowering the bar to entry for would-be homebuyers, raising the price cap on insured mortgages and expanding the availability of 30-year amortizations.
The role of family support is also increasingly difficult to ignore when it comes to who can afford to buy a home.
Thirty per cent of those polled said they’re living with family to save for a down payment, paying little-to-no rent along the way. Nearly a third (32 per cent) said they expect to receive some financial support toward a home purchase.
The desire to push through comes from a belief among many of the respondents that homeownership is a good long-term investment and provides stability.
Some 84 per cent of those surveyed said they think owning a home is a worthwhile investment, with just under three-quarters saying it’s a “priority” for them to achieve in their lifetime. Almost a third (32 per cent) said owning a home was part of their retirement plan, with another 45 per cent citing stress over renting due to tenant-landlord policies.