Canadians under the age of 35 are carrying greater financial debt than two years ago and face increasing challenges to achieving home ownership, according to the agency Statistics Canada.
Young households had seen their mortgage burden increase over the past 12 months, and their accumulation of wealth was slowing.
StatCan pointed to higher interest rates and rents as principal reasons for the trend, together with higher living costs following the post-Covid inflation spike.
However, wealth was growing for the many young Canadians who owned their homes, due to rising property values.
In its report, StatCan quoted separate research that noted a rising trend in parents giving money to their children to ensure they could purchase property. Not only was this becoming increasingly common, but the sums involved were rising.
However, not everyone in the under-35 cohort is lucky enough to receive this type of financial help.
StatCan noted a trend among some young Canadians of either downgrading to more affordable accommodation or deciding not to enter the housing market until the Bank of Canada began reducing interest rates from their current 5% level.
The agency said that last year under-35s were spending 10% of their income on servicing debt compared with 7% in 2022.
While some were “starting to turn away from the housing market,” StatCan said rising rents would likely cause tenants to face a greater financial burden than homeowners.
“Sustained food inflation, elevated housing prices and increasingly unaffordable rental costs across much of the country are casting a shadow over the homeownership dream for many households and, in particular, for young families,” the report said.
The StatCan report aligns with a recent Royal Bank of Canada statement that suggested Canada’s future wealth divide would be between those who owned a home and those who rented.