Roughly two thirds of Canadian Millennials say home ownership is in their plans for the future, according to a recent poll, but there’s a snag: close to half of these aspiring homebuyers haven’t saved a penny for property.
While 64 per cent of Millennials who responded to a CIBC poll identified buying a home as being somewhere on their horizon, 44 per cent of these would-be buyers don’t have any portion of a downpayment saved, according to the bank.
Despite this, 63 per cent of those planning to buy a home have a target for ownership set within the next five years, according to the bank, which counts Millennials as being aged 18 to 34.
“Millennials want to own, and many to do so in the next few years, but they’re facing many obstacles and competing financial priorities,” says Barry Gollom, vice president of mortgages and lending at CIBC.
Among Millennials with plans to buy a home, 54 per cent checked off saving for the required downpayment as a major obstacle.
Income and employment also posed challenges. Fifty-three per cent of Millennials intending to snap up property cited job security and having earnings high enough to cover mortgage payments and everyday expenses as another hurdle.
Meanwhile, 46 per cent acknowledged rising real estate prices — in April, the average Canadian home price was up 13.1 per cent from last year, according to the Canadian Real Estate Association — as an obstacle.
Managing other financial priorities was a stumbling block for 45 per cent of those wanting to buy as well.
Although a considerable number of Millennials have set aside zero dollars for real estate, a similar share — that’s 45 per cent — have saved at least some portion of a downpayment.
One quarter say they have socked away a 25 per cent of the downpayment, 7 per cent have set aside half and 5 per cent claim they are three-quarters of the way there, according to the poll of 864 Canadian Millennials logged onto the Angus Reid Forum from April 15th to 20th.
Ponying up the downpayment is not an issue for the 8 per cent who say they have already saved the full amount but have yet to purchase.
That’s likely an enviable position for many Millennials, save for the 16 per cent of all respondents who say they already own a home — and the 20 per cent who have no such plans.