Photo: Kurt Bauschardt/Flickr
Buy or rent? According to a Bank of Montreal (BMO) report published this week, the answer is rent for most Canadian Millennials.
While 60 per cent of those surveyed said they are tired of paying rent, and 89 per cent believe there is value in home ownership, 70 per cent plan to put off buying until they can get what they “really want” in a home.
For many Millennials, defined by BMO as those between the ages of 19 and 35, making a good investment is a priority. Over two-thirds are concerned about buying a home and then finding something wrong with it, or about purchasing property and seeing it drop in value.
Damon Knights, director of home financing at BMO, explained that these worries reflect the fact that most Millennials in Canada see buying a home as an investment decision rather than achieving a milestone. “Our young clientele are savvy and mindful of how their investments will grow, and this holds true when it comes to real estate,” he said.
Only 26 per cent of respondents identified themselves as “very likely” to buy within the next year, while 66 per cent said that other goals outweigh their desire to own a home. For example, 42 per cent would prioritize travelling, going back to school or starting a business over home ownership, while 31 per cent would rather pay off debt.
And while Knights commended young homebuyers for not entering the market before they are ready, he cautioned that they should not wait too long to do so. “[A]s they sit on the sidelines, they need to be mindful that the market is not waiting for them,” he said, pointing out that if housing prices continue to rise, the amount of money required for a down payment will only increase.
The survey of 2,079 Canadian Millennials was conducted by Pollara on behalf of BMO between March 14th and 17th, 2016. BMO’s report on the results is titled “Bank of Montreal Millennial Home Buyer Report.”