VANCOUVER (NEWS 1130) – Most of them want to buy a home but half admit it’s a fantasy. Despite being the most educated generation with higher incomes, homeownership is apparently out of reach for Canada’s millennials.
A KPMG poll shows 72 per cent of millennials say their goal is to own a home, but almost half — 46 per cent — admit it’s a pipe dream.
“The combination of rising house prices, high levels of personal debt and annual incomes that are just a fraction of the cost of buying a home compared with their parents’ generation, is pushing the dream of home ownership out of reach for many millennials,” says Martin Joyce, Partner, National Leader, Human & Social Services, KPMG. “This is particularly challenging in the markets of Vancouver and Toronto.”
Another 46 per cent of millennials say they have needed help from mom and dad in order to become a homeowner.
Even if millennials do manage to buy a home, which has historically been a foundation for retirement, many are skeptical it’ll be worth it. Thirty-eight per cent polled believe their house won’t be worth as much in the future.
As the most educated generation, KPMG notes many people who are part of Generation Y have incurred “high levels of student debt.” Millennials who have been able to buy a home have had to take on larger mortgages, KPMG says Statistics Canada has found.
“While millennials have higher incomes than previous cohorts, in part because of their higher educations, they are not necessarily better off, the poll indicates,” the survey finds.
When it comes to debt, the firm says that has been on an upward trend for three decades, and has reached record highs.
KPMG finds the majority of all generations want the federal government to take more action to help millennials. Ways Ottawa can help, respondents say, include making housing more affordable, making it easier to use RRSPs for down payments, raising TFSA limits, and implementing a new savings system — like RESPs — to make housing more affordable.
It’s estimated it would take a millennial about 13 years to save enough money for a 20 per cent down payment. That time frame was just five for the previous generation, according to KPMG, which cites Canadian Mortgage and Housing Corporation data.
“That’s eight fewer years that millennials might have for saving more for their retirement,” Joyce says. “If they do manage to save up and buy a house now and delay retirement savings, our poll finds 65 per cent of millennials fear they won’t have enough saved for retirement.”
In Sept. 2019, Zoocasa reported it would take an average 52 years to save for a typical home in Greater Vancouver for a household making a typical income of just over $70,000.
-With files from Mike Lloyd