The dream of owning a home is still very much alive among Canadian millennials, but when it comes to saving for it they are lagging.
A new poll of 18-37 year-olds by CIBC has found that 46% intend to buy a home in the next five years but 76% have yet to start saving or have saved less than a quarter of their down payment.
"Our survey reveals that few millennials are taking the necessary steps to make the move to homeownership," says Grant Rasmussen, Senior Vice President, Mobile Advice, CIBC. "You can't buy a home with intent and desire alone. It's important to have a financial plan to make the most of your income and set yourself up with the right savings plan to achieve your goals now and in the years ahead."
Four in 10 Canadian millennials currently rent and almost a quarter live with their parents with 94% of those intending to become homebuyers. However, 45% say they don’t believe it is realistic or desirable anymore.
More than a third are already homebuyers but 58% are concerned that rising interest rates will impact their ability to manage current household expenses.
"While most still dream of owning a home one day, higher house prices, the prospect of higher rates, and new qualifying rules are prompting some millennials to pause and question whether being a homeowner is realistic or even desirable for them," says Mr. Rasmussen. "The key is to understand your total housing costs and start planning early so you can consider your rent versus buy options in the context of your overall financial plan and desired lifestyle."
Although many respondents to the poll say that renting can be as expensive as homeownership, they are concerned about the costs of ownership.
But millennial homeowners manage to save more each month ($566 on average) than renters ($368) or live-at-homers ($360), and homeowners have amassed an average nest-egg of just over $60,600 - more than double that of their peers who rent or live at home.