TD Canada Trust published new research that highlights the differences in the challenges Millennials say they face as first time buyers compared to the challenges Boomers recalled from when they first entered the market.
The findings point to big shifts in Canadian real estate in the last 30 years. The three obstacles facing Millenials are:
- Saving a large enough down payment (57 per cent of Gen Y non-homeowners, versus 33 per cent of Boomer homeowners).
- Property prices are too high for first time buyers (52 per cent of Gen Y non-homeowners, versus 16 per cent of Boomer homeowners).
- Not earning enough to afford monthly mortgage payments (48 per cent of Gen Y non-homeowners, versus 13 per cent of Boomer homeowners).
The Canadian market has seen some pretty big price bumps in the last few years and Gen Y is well aware of that fact: half of Millennials think home prices will continue to increase over the next year and more than half (57 per cent) feel that saving a big enough down payment is a concern.
Farhaneh Haque, Director, Mortgage Advice, TDCanada Trust, suggests future homebuyers create a “down payment fund” by setting up automatic transfers each month into a TFSA or high interest savings account, or take advantage of the federal government’s Home Buyers’ Plan, which lets you borrow up to $25,000 from your RSP.
In terms of mortgages, one-quarter of Generation Y see the tighter lending conditions as a barrier to entering the market. Only 6 per cent of Boomers felt this was a roadblock when they bought their first home.
Another big difference between Boomer and Millenials experiences? A little something called student debt. While only 2 per cent of Boomers saw outstanding school bills a as a barrier to homeownership when they were first-time buyers, 23 per cent of Gen Y say they had to get their student debt under control before touring open houses.