Despite the strength of Canadian property prices, a new survey says many Gen Z and Millennials remain optimistic about their chances of owning their own home.
As an experienced local brokerage, our agents can see how the high level of interest rates is holding many back from making a purchase or selling in the current environment.
Our observation is supported by a Bank of Montreal survey that finds 68% of Canadians are waiting for mortgage costs to fall before making a purchase.
Interestingly, the website Realtor.ca recently revealed that more than half of its traffic of registered users (55.4%) is being generated by those aged 18-44.
In a separate survey, 60% of millennials said they had not given up hope of ownership and 51% said they intended to enter the market within five years.
Underestimating the influence of the Millennial and Gen Z demographics on property values would be a mistake.
Canada has more than 6.7 million Gen Zs, who were born from 1997-2012 (Millennials were born from 1981-96), and they are becoming an increasingly important demographic for the real estate market.
The optimism of the younger generations and their desire to own property fortifies the values of every level of the market.
Below, we’ve listed some tips to help you if you’re a Gen Z or Millennials to save a deposit and purchase your first home.
Research – Understand the government programs designed to make property ownership more affordable for you. Incentives include potential grants or tax credits to accelerate your savings program. Check out the Home Buyers’ Plan (HBP), which allows you to withdraw from your Registered Retirement Savings Plan (RRSP) for a downpayment.
Clarity – Don’t wander into the real estate market without a purpose. Be clear about the type of property you want, its location and your spending power.
Smart money – By creating a budget for your day-to-day spending, you will implement a savings program to help you reach your deposit goal faster.
Auto-payments – One effective strategy is to automate a funds transfer to your savings deposit each month. This way, you’ll be less tempted to break your savings discipline.
Frugal first – While you don’t need to live on the breadline, you should avoid spending money on big items, such as a new car or a big holiday before you start home shopping. When a lender looks at your financial records, they will want to be reassured you are disciplined with your money.