Canada’s residential real estate market is finally showing signs of a sales slowdown, but homeownership remains out of reach for the majority of hopeful buyers.
Seventy-five percent of Canadians who don’t currently own a home, but want to buy one, can’t afford to, according to new insights published this week by Manulife Bank of Canada in their bi-annual Debt Survey.
The survey — which was carried out by Ipsos between April 30th and May 4th, 2021 — collected responses from 2,001 Canadians between the ages of 20 and 69 across all provinces with a household income of more than $40,000.
As home prices reach all-time highs across the county, the survey explains that homeownership is becoming increasingly difficult to achieve for many Canadians. Two-thirds of those surveyed — 67 percent — said that they worry about prices in their local community, and believe that they may have to move to another area if they want to buy a home. Seven out of 10 Canadians who do not own a home worry about saving for a downpayment. Thirty-nine percent of Canadians “worry a lot” about saving.
Out of the generations that have been able to purchase during the COVID-19 pandemic, Gen Z and Millennials were more likely to report having bought a property. However, this is not without the help of their parents. About one-third of homeowners said they needed help from their parents when purchasing their first home. This number rises to 47 percent of Gen Z homeowners and 46 percent of Millennials.
“With the housing market pricing many Canadians out of the market, younger generations are forced to turn to their parents to close the gap,” said Rick Lunny, President and CEO of Manulife Bank, in the report. “Although this can be an effective short-term solution, it can actually be exacerbating the problem.”
While rising housing costs are keeping affordable homeownership out of reach for many Canadians, Manulife Bank also pointed out that the cost of living may also be rising too quickly. Sixty-one percent of those surveyed said that the cost of living for their household has increased over the past year, while only seven percent have reported a decrease in their living costs.
“This finding suggests that wages might not be keeping up with inflation, which might be of some cause for concern,” said the report.
