VANCOUVER (NEWS 1130) – More than a third of non-homeowners under the age of 40 in Canada have given up on the dream of ever owning a home, according to new data from RBC, however many others are still trying to put away money to buy.
The RBC Spring Housing Poll of 2,000 adults found 36 per cent of young Canadians say they will never own a home and 62 per cent of all Canadians surveyed think the majority of people will be priced out of the country’s market in the next decade.
However, the pandemic has offered hopeful homeowners the chance to save, with 60 per cent of those on the hunt putting away $789 on average each month. A third of Canadians hope to buy a home in the next two years, up 8 per cent 2020, while that number rises to 49 per cent for those respondents under 40.
“The road to home ownership isn’t always easy and the last year has created both challenges and opportunities for home buyers,” said Amit Sahasrabudhe, Vice-President, Home Equity Financing, Products and Acquisitions, RBC. “Potential homebuyers need to look at their personal financial situation as well as the current economic environment as both can have a big impact on the ability to purchase a home.”
When it comes to the decision to buy now or buy later, most people, 54 per cent, believe it’s a seller’s market, up from 41 per cent last year and the highest that percentage has been since 2009. People are balancing low interest rates, rising prices, and anxiety over their jobs and the economy. Three in five Canadians also think home values will only go up in the near future, while four-in-five say housing is a good investment.
“Historically low mortgage rates and continued economic uncertainty have created a lot of unknowns for home buyers,” says Sahasrabudhe. “As we continue into year two of the pandemic, knowing how much flexibility you have in your finances has never been more important. In addition to evaluating what you can afford now, potential home buyers should put their finances through a stress test to see if they can continue to carry the cost of owning a home if interest rates increase or if they had an unexpected expense or income loss.”
While most Canadians say they don’t want to put themselves in a situation of spending all their money on a home, nearly half of people planning to buy a home had a budget of less than $500,000. The average price of a home in Canada was $678,091 as of February 2021, according to the Canadian Real Estate Association. That number only goes up to $887,695 in British Columbia and $864,159 in Ontario.
Despite 90 per cent of those who said they want to buy a home in the next two years having savings, they only totaled $42,000 on average, while 40 per cent have less than $25,000 put away.
With files from Dean Recksiedler