Two major mortgage lenders say that their research shows a strong desire among young Canadians to become first-time home buyers in this decade.
RBC’s Home Ownership Poll reveals that 43 per cent of 18 to 24-year-old Canadians are considering buying a home within the next 2 years; up from 34 per cent in 2015. Across all age groups 29 per cent are considering a purchase within 2 years. The desire is strongest in Alberta where more than a third of all age groups are considering a purchase.
Three quarters of Canadian millennials believe that home purchase is a good investment. “For many millennials, home ownership is a natural part of their journey and we’re seeing the next generation eager to get into the market, even if that means exploring alternate options like buying with family or a friend,” says Erica Nielsen, vice-president, Home Equity Finance, RBC.
Meanwhile, BMO’s poll shows that 76 per cent of millennials are intending to buy within 5 years. That is very much dependent on affordability though, as 29 per cent believe they will never be able to afford a home.
If they do buy, millennials will have an average $350,000 to spend, BMO found. They expect to have downpayments of 15 per cent but as much as 10 per cent of their home price may come from parents or other family members. Sixty-percent say they are struggling to save enough for a home that meets their needs.
When considering how much they can afford for a new home, two thirds (67 per cent) consider the amount they can afford in monthly mortgage payments, while another half (54 per cent) consider how much of a mortgage a bank will give them. In addition, over half (57 per cent) of millennials are worried they might not be pre-approved for a mortgage.
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