Home ownership continues to be a priority for most young adults. Three quarters of Generation Z-adults in Canada, plan to buy a home in their lifetime. Half of whom say that goal is ‘very likely’ according to a new study commissioned by Sotheby’s International Realty Canada and Mustel Group. Not only that, but 15% of them already own their primary residence.
Who are this Generation Z?
Generation Z is the demographic cohort following Generation Y – which is more popularly known as the Millennial Generation. They were born between the late 1990’s and early 2010’s. At over 2 billion individuals, Generation Z is the most populous generational cohort of all time and retailers are finding it challenging to capture their increasing spending power.
Younger than Millennials, those in the Generation Z cohort, are typically between the ages of 18 and 28.
The report stated, ‘it is clear from our research that while rising housing affordability challenges are top-of-mind for Canada’s Generation Z homebuyers, the desire and demand for home ownership and specifically, single-family home ownership, has not subsided from previous generations. The older segment of this generation is now on the brink of first-time homeownership and are posed to be both and influential consumer force in the Canadian housing market, and a prominent voice in defining housing needs in our communities.
While the intention and desire to own a home is shared by many young adults, they’re also fully aware of the challenges they face, notably the restrictively high prices.
Another concern is that they won’t be able to afford their preferred housing type. While 70% say they would prefer to buy a single-family home during their peak earning years if budget wasn’t a consideration, about 1/2 have already given up hope of owning one. Instead, half of those surveyed, said there most likely purchase, will be higher-density housing type, such as a condo, attached home/townhouse or duplex.
The top barrier cited to home ownership, was saving for their down payment.
The average time needed to save for a down payment in the country’s largest urban markets, has increased to more than 6 years, according to the latest data from the national Bank of Canada. (That’s based on a savings rate of 10% of the median pre-tax household income.) In Toronto and Vancouver, the time needed to save for a minimum down payments, soars to 27.5 years and 36 years. which is why gifted down payments from family members are figuring more prominently in today’s home purchases.
If you are currently looking to see what your purchasing power is, don’t hesitate to contact us.
Original article: www.canadianmortgagetrends.com