Canada’s next generation of homebuyers, aged 18 to 38, see real estate as a long-term investment despite how unaffordable it may seem.
Eighty-four per cent of respondents in the Royal LePage 2024 Next Generation Survey feel this way. The majority live in Saskatchewan and Manitoba (94 per cent) and Atlantic Canada (93 per cent).
Three quarters of those who do not currently own a primary residence say that owning a home is a priority for them and a milestone they hope to achieve in their lifetime. Just over half of respondents believe that home ownership is an achievable goal. Twenty-six per cent are unsure and 20 per cent do not believe it is achievable for them at all.
Strong savings and confidence in their career trajectory was cited as the most common factors driving this belief that home ownership is within reach. Respondents in Quebec are the most optimistic about owning a home, while those in Ontario are the least likely to say it is achievable.
“What is both surprising and promising in these findings is the practical and purposeful manner in which these people are tackling affordability barriers,” said Phil Soper, president and CEO of Royal LePage. “They are well educated on the state of the real estate market and the wide variety of government programs put in place to assist young families find homes. They are hyper-focused on saving for a down payment, which is often the biggest hurdle homebuyers face. And, they are open to creative solutions, such as shared ownership with friends and family, or buying a property with the express intention of renting a portion of the home to a tenant.”
About 73 per cent of the next generation potential homebuyers say they desire a permanent place to live that is their own, while 57 per cent say that owning a home provides stability. Forty-five per cent say that renting is restrictive due to tenant-landlord policies, and 32 per cent say home ownership is a key part of their retirement plan. Respondents were able to select more than one answer to this question and others.
Forty per cent of respondents who plan to purchase say that they wish to buy a property within the next five to 10 years, while 25 per cent say they are planning to purchase a home more than 10 years from now. Nearly one in five respondents say they plan to purchase a home within the next three years, and another 13 per cent plan to buy in three to five years despite supply shortages.
Almost half are regularly saving a portion of their earnings for a down payment. Forty-two per cent say they are diligently paying their loans and bills to ensure a good credit rating and 34 per cent say they are reducing their discretionary spending in an effort to save more. Thirty per cent are living with family and saving for a down payment, paying little to no rent.
To increase their chances of being able to afford a home, 45 per cent of respondents who are planning to purchase say they would consider buying a property with the potential for rental income to offset their mortgage costs, and 31 per cent would consider a rent-to-own program, where the occupant leases the property and a portion of the monthly payments is put towards a future down payment on the unit.
If and when they do buy, nearly half of respondents say they will not receive any financial assistance from family members, but 32 per cent say they will receive some form of financial support toward the purchase of their first home.
