Do Canadian Millennials Own Homes?
Millennial home buyers are a large and growing demographic in Canada. In fact, one third of Canadian millennials already own a home, and according to HSBC, 82% of millennials who do not yet own a home plan to buy a home within the next 5 years.(1)
Why Are Millennials buying homes?
Nearly 90% of peak millennials believe that homeownership is a good investment and see it as a way to increase their wealth. Beyond the financial benefits that come with home ownership, millennials also value owning a property versus renting one.(2)
Key Considerations for Millennial buyers
Budget: Of the millennial non-homeowners, just over 50% have only set out an approximate budget. A large reason for this is because many of these buyers do not understand the full costs that go into ownership. Further, with prices of homes going up in Canada yearly, buyers need to be aware of the changing markets. At Homewise, we provide many smart resources, such as this article on “The Cost of Ownership” that will help home buyers understand the costs beyond just the down payment. Our mortgage experts are also always available by phone, messenger or email. .
The Bank of Mom and Dad: 37% if millennial home buyers received a “gift” from their parents as help for their down payment. As almost half of Millennial home buyers exceeded their original budget for their home, their family acts as a support to help afford the downpayment.
Buying a Home Means Life Changes: many millennials state that they will change their current living habits (i.e. going out for dinners and going away for vacations) to be able to afford their home. This is an important consideration for any home buyer as home ownership can be expensive and have some hidden fees that you do not expect (i.e. repairs). So we always suggest that home buyers don’t change their lives, but instead make small money saving alterations that will help them feel more financially secure.
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Resources: RBC -http://www.rbc.com/newsroom/news/2017/20170410-homeownership.html HSBC -http://www.about.hsbc.ca/-/media/canada/en/news-and-media/170228-new-global-study-en.pdf Cision -http://www.newswire.ca/news-releases/largest-cohort-of-millennials-changing-canadian-real-estate-despite-constraints-of-affordability-and-mortgage-regulation-640869803.html
