Despite recognizing its strong investment potential, getting started is just not achievable for many under 40s
As a key investment for many Canadians, buying a home has long been a financial goal for young adults, but that could be changing.
Sky-high prices and no signs of that changing anytime soon has dampened the enthusiasm of Canada’s under 40s to such an extent that more than one third have already given up the homeownership dream
A poll released today (April 12) by RBC shows that 83% of all adult respondents think housing is a good investment but despite low interest rates, 62% think most people will be priced out of homeownership in the next decade.
For those that are keeping the dream alive and hoping to buy in the next two years, the average amount being saved (by the 60% who are saving monthly) is $789 per month.
Slightly more than half of respondents said that it’s currently a sellers’ market but 49% of under 40s and 30% overall are intending to buy in the next two years. This rises to 66% among those who have been in Canada for less than 5 years.
When considering a down payment, most of those who are likely to buy in the next two years have some money saved for a home purchase (86%), with $42,000 in savings on average, while 40% have less than $25,000 earmarked for their home purchase.
Affordability not the only concern
However, for those holding back on homeownership, affordability is only the third most-cited reason. Uncertainty about the economy (56%) and a belief that prices may come down (41%) are the top two.
“Historically low mortgage rates and continued economic uncertainty have created a lot of unknowns for home buyers,” said Amit Sahasrabudhe, Vice-President, Home Equity Financing, Products and Acquisitions, RBC. “As we continue into year two of the pandemic, knowing how much flexibility you have in your finances has never been more important.”
