That’s how Benjamin Tal, deputy chief economist at CIBC World Markets, sees the market avoiding a steep decline in home prices.
His analysis runs contrary to the theory that population growth won’t be robust enough to sustain housing demand, leading to a price drop.
“This demographically driven fear is much ado about nothing,” Tal said on Thursday.
He went on to point out that although young people may have to put off purchasing a house because of student debt, their wealthy parents can lend a helping hand (read: some much needed cash).
“This is actually the first generation that the parents are better off than the kids and those parents will write a nice cheque,” Tal said in an interview. “The student debt level is not significant enough to really kill the housing market.”
The 25-34 age group is important because they make up the majority of first time homebuyers.
Tal also noted that the younger generation has the option of living with their parents while making payments on their debt and saving for a downpayment. Once they’ve flown the coop, the economist believes they’ll be “extremely dynamic” and employable allowing them to purchase houses.
Gotta love that optimism!