With the cost of living on the rise across Canada’s major metropolitan markets, young families are struggling to finance their homeownership dreams.
According to the report, titled ‘Financing The Canadian Dream,’ 33 per cent of respondents say the main obstacle to saving for homeownership is cost of living expenses.
To overcome the struggle, 20 per cent of respondents put off saving for retirement, 19 per cent sought higher paying jobs and 14 per cent took up a second job. Twelve per cent of modern family homeowners opted to put off starting a family while nine per cent moved back in with family to save money.
“The dream of homeownership remains compelling for today’s young families, but the reality is that many are facing serious obstacles to achieving this given rising costs of living, rising costs of housing, and other financial needs, such as saving for retirement,” says Brad Henderson, President and CEO, Sotheby’s International Realty Canada. “While these are significant challenges without a simple or singular solution, our research reflects strategies from those who have navigated their way and successfully bought a home. There is no doubt, however, that in an environment of higher interest rates and tighter mortgage guidelines, today’s families will continue to confront new challenges as they make home buying decisions in this year’s market.”
Canadians are taking drastic measures to save up for a home. The report indicated that 51 per cent of Canadian families reduced or eliminated dining out, 45 per cent reduced or eliminated travel and another 45 per cent made cuts to personal spending. Other cuts made by downpayment saving Canadians included health and fitness expenditures (37 per cent) and vehicle costs (15 per cent).
Compared to the rest of Canada, Torontonians were the most likely to pick up a second job to help finance their downpayment. Torontonians were also more likely to put off starting a family and to move back in with their family at rates of 15 and 13 per cent respectively.
The survey’s findings also revealed how young Canadians are funding their down payment. 71 per cent of respondents said personal savings and cash would be their primary form of funding while 52 per cent said their downpayment funds would come in the form of a monetary gift. 31 per cent said they’d borrow from RRSPs and 25 per cent said their downpayment would be funded from the sale of another property.