Housing affordability challenges haven't snuffed out most young adults' aspirations, but they're resetting their expectations
Housing heat and bidding wars continue to rage in Canada’s most active markets, but that isn’t stopping the youngest generation of adults from pursuing their ambitions of homeownership, according to a new report from Mustel Group and Sotheby’s International Realty Canada,
Drawing from a survey of 1,502 Generation Z Canadians who are between the ages of 18 and 28 in the Vancouver, Calgary, Toronto and Montreal Census Metropolitan Areas, the report gives valuable insight into the intentions and attitudes of young would-be homeowners.
“This study is the first of its kind in Canada to focus on this influential next generation of home buyers,” said Josh O’Neill, general manager of Mustel Group. “The findings reflect the sentiments and aspirations of young Canadians, and reveal trends that will have a significant impact on the future of the country’s housing market.”
Among the urban Generation Z adults surveyed, 75% said they are likely to buy and own a primary residence in their lifetime, including 49% who said they are “very likely” to do so and 11% who already own their home.
A 70% majority said they’d want to purchase a single-family home in their peak earning years if budget were not a consideration, while 13% and 11% say they would prefer to buy a condominium or attached home.
Of the survey participants who have not yet bought a home, 82% are concerned that rising housing prices would force them to buy one outside their community of choice, including 38% who were “very worried.”
While two fifths (39%) said they’re most likely to get a single-family home as their first residence, half of respondents have already given up on that lofty goal; 34% said they gave up due to the high cost. With that in mind, 25% said they’re looking at a condominium for their first home purchase, 18% said they’re considering an attached home or townhouse, and 7% are aiming for a duplex or triplex.
When asked what financial barriers prevent them from saving up for a down payment, 28% cited current living expenses, making it the top answer in the survey.
The poll also exposed differences across Gen Z segments in Canada’s four largest metropolitan areas. Those in Montreal and Calgary expressed more confidence in their chances of homeownership, with 79% and 78% saying they’re “very likely “or “somewhat likely” to do so. In contrast, just 73% and 71% of those in Toronto and Vancouver, respectively, said the same.
With respect to single-family homeownership, Calgary respondents were the least likely to give up on that aspiration (39%). Fifty per cent of that group also identified single-family homes as their most realistic and most likely first home purchase, compared to 33%-40% in other regions.
“It is clear from our research that while rising housing affordability challenges are top-of-mind for Canada’s Generation Z homebuyers, the desire and demand for home ownership and specifically, single family home ownership, has not subsided from previous generations,” said Don Kottick, president and CEO, Sotheby’s International Realty Canada.
