Canada’s youngest generation of potential homebuyers say they are pretty optimistic about attaining home ownerships at some point in their life, but others have moved on from the prospects of ever possessing a single-family property.
According to a new report released today by Sotheby’s International Realty Canada, 75 per cent of Generation Z urban adults (those born between 1993 and 2011) are likely to buy and own a primary residence in their lifetime. A little under half (49 per cent) of respondents said that they “very likely” to do so, with 11 per cent stating that they already own a home.
The report, which was conducted by Mustel Group, surveyed 1,502 Gen Z Canadians who are located in the Vancouver, Calgary, Toronto and Montreal Census Metropolitan Areas and between the ages of 18 and 28 years old.
“It is clear from our research that while rising housing affordability challenges are top-of-mind for Canada’s Generation Z homebuyers, the desire and demand for home ownership and specifically, single family home ownership, has not subsided from previous generations,” said Don Kottick, president and CEO of Sotheby’s International Realty Canada, in the report.
“The older segment of this generation are now on the brink of first-time homeownership, and are poised to be both an influential consumer force in the Canadian housing market, and a prominent voice in defining housing needs in our communities,” he added.
Between the four largest Canadian metropolitan areas, 73 per cent and 71 per cent of those living in Toronto and Vancouver said that they were “very likely” or “somewhat likely” to buy a home in their lifetime. Gen Z’ers living in Montreal and Calgary had greater optimism, with 79 per cent and 78 per cent sharing the same positive sentiments.
Like many prospective purchasers these days, the majority of Gen Z buyers who have yet to purchase their first property (82 per cent) said that they are worried that they will not be able to buy in the community of their choice thanks to rising prices — 38 per cent of respondents said that they were “very worried” about this.
When it comes to saving for a downpayment, 28 per cent reported paying for current living expenses as the biggest financial barrier. Paying off student loans, non-essential lifestyle expenses and personal education were also listed as hurdles to saving for a down payment.
Although there’s no lack of financial fears among Gen Z, 70 per cent of those surveyed said that they would want to purchase a single-family home in their peak earning years if budget was no issue. A smaller subset of the Gen Z group, 13 per cent and 11 percent, said that they would prefer to buy a condominium or attached home.
However, 50 per cent of Gen Z reported that they’ve already given up on the dream of owning a single-family home, with 34 per cent saying that they have done so due to the high cost. Because of this, about half of those surveyed said their “most likely and realistic first home purchase,” would be a higher-density housing type. Twenty-five per cent, 18 per cent and seven per cent of respondents said that their first home purchase would most likely be a condo, an attached home or a duplex/triplex.
Those residing in Calgary were reported to be the least likely to have already given up hopes of single-family ownership at a rate of 39 per cent. They were also more likely to consider single-family homes as their first purchase choice (50 per cent) compared to the other three regions (between 33 to 40 per cent).
“At a time when soaring living costs, policy-driven inflation, and rising real estate prices are eroding the standard of living for many young Canadians, the relative affordability of housing in cities like Calgary and Montréal are a true competitive advantage in retaining and attracting young people striving to buy their first home,” said Kottick.
