Ignorance may be bliss, but it’s not blind enough to buy you a home.
Despite the Canadian housing market managing to maintain much of its strength through a pandemic that is currently decimating the Canadian workforce, a recent survey from Finder.com shows that an incredible 81% of the country’s Gen Zers think they’ll purchase a home in the next 20 years.
What’s more, 10% of the 18-24 age group say they already own their own home, while 35% (one in three!) believe they’ll purchase a home within the next five years.
The survey, which asked 1,213 Canadian adults about their homeownership thoughts, dreams, and realities, also showed that 1 in 10 Canadians – or about 3.4 million people – think they will be “forever renters.” Another 1 in 10 say they’re simply not interested in ever owning a home, putting the number of Canadians who believe they’ll never be a homeowner somewhere around 1 in 5, or 20% of the adult population.
Just 4% of Gen Z responded that they had no interest in owning a home and only 2% believed it would take them more than 20 years to be able to afford a home.
According to the findings, “it turns out the older you are, the more likely you are to think homeownership won’t be in your future.” While there could be many reasons for this correlation, it at least seems that in cities such as Toronto reality might play a factor in this realization.
Currently, even with the impact of COVID-19, the average home price in Toronto proper is hovering around $880,000. Condos are the lowest entry point ($612,000), while detached homes remain the highest ($1,249,000). So it shouldn’t come as too much of a surprise that a recent study found it would take the median-income household 32 years simply to save up the amount necessary for the downpayment on a Toronto home (based on an $800,000 average).
Perhaps it’s no wonder that Finder.com’s survey also found that 11% of Ontario respondents believed they would be renting forever.
It is certainly worth noting that this survey was commissioned by Finder and conducted by Pureprofile in October 2019, long before the pandemic took a stranglehold on the lives of many Canadians, regardless of their generation.
What’s more, recent data from Altus Group found that, across the country, first-time homebuyers between the ages of 25-44 accounted for more than 80% of sales for all first-time homebuyers in Canada in the past two years. However, in just the week of March 15-21 alone, Stats Can found that of those in the core working ages of 25 to 54, women saw their unemployment rate jump 2.8 percentage points to 7.4%, while men saw their rate climb by 1.1 percentage points to 5.9%. This will undoubtedly have an impact on the number of first-time homebuyers in the short term.
So the real question now is, does Gen Z still see the future full of homes, or are they suddenly more concerned about where their next paycheque is coming from?
For an in-depth look at where the real estate market currently finds itself in the time of COVID-19, including insights from Don Kottick, president and CEO of Sotheby’s International Realty Canada, Benjamin Tal, deputy chief economist at CIBC, John Pasalis, president of Realosophy Realty, and many others, you can check out our Real Estate of the Union.