Rising financial pressures challenge younger Canadians, but demand for home-buying support grows
The latest Scotiabank Housing Poll indicates that despite challenges, the desire for homeownership remains strong among younger Canadians.
Majority of Millennials (55 percent) and Gen Z (58 percent) feel buying a home is unattainable, yet more than half of Canadians aged 18 to 43 (58 percent) still aim to purchase a home within the next five years.
While the economic climate has shown some shifts, including a recent decrease in interest rates after a four-year high, over half of Millennials and Gen Z (56 percent) report that current economic conditions are straining their finances, prompting many to delay their plans to buy a home.
This sentiment has grown by 12 percent since 2021, with older Canadians showing a 16 percent increase in economic concerns, while affordability worries among younger Canadians (aged 18-34) have remained constant.
Despite a recent decline in homeownership among younger Canadians, this group’s long-term commitment to owning a home appears undeterred.
“Canadians continue to face barriers in today’s challenging housing market. While homeownership may feel out of reach for many young Canadians, their determination to achieve it remains unwavering,” stated Tracy Gomes, senior vice president of Real Estate Secured Lending at Scotiabank.
Gomes emphasized that with the vast amount of available information, Scotiabank aims to assist first-time and recent homebuyers with customized financial advice and tools to help them pursue their dream of homeownership.
Younger Canadians who have already bought homes are also facing upcoming mortgage renewals.
Nearly 72 percent of Gen Z and 48 percent of Millennial homeowners are approaching their first renewal, compared to only 14 percent of Gen X and 10 percent of Boomer homeowners.
Though interest rates have declined, mortgage renewal remains a concern for 68 percent of Canadians across generations, with 44 percent specifically focusing on securing a competitive rate when choosing a mortgage.
Financial improvements over the past year have led 37 percent of Gen Z and 31 percent of Millennials to accelerate their home-buying plans, in contrast to just 15 percent of Gen X and 10 percent of Boomers.
Gen Z, in particular, places high importance on a fully online mortgage application process, with 35 percent favouring this option, compared to only 5 percent of Boomers.
While younger Canadians show a strong desire to own homes, a notable percentage remains unsure about the necessary steps, with 27 percent of Millennials and Gen Z indicating a lack of confidence, compared to 15 percent of Boomers.
Many young Canadians are increasingly calling for accessible, clear guidance on the home-buying process. Among Gen Z and Millennials, 63 percent and 54 percent, respectively, express a need for better support from their financial institutions.
Scotiabank offers resources to simplify home-buying, including digital tools like the Mortgage Calculator and What Can I Afford Calculator. Clients can receive tailored advice from a Scotia Home Financing Advisor or use Scotiabank eHOME to manage their mortgage online.
The First Home Savings Account (FHSA) also allows Canadians to save up to $8,000 per year, tax-free, for home purchases, which can be combined with the Home Buyers' Plan for additional RRSP withdrawals up to $60,000.
