A large share of these segments plan to take out new loans in the near future
Demand for loan products such as mortgages remains strongest among Gen-Z and millennial Canadians, with a large share of these demographics saying that they plan to take out new loans over the next year, according to TransUnion.
“As the economy reopens, Canadians have remained resilient and are hopeful about their financial futures,” said Matt Fabian, director of financial services research and consulting at TransUnion. “While many consumers are cautiously sitting on the sidelines, cutting back on spending and waiting to take on additional credit, younger generations – Gen Z and millennials – are showing a greater appetite both for credit and increased discretionary spending compared to older generations.”
Nearly half of Gen-Zers (48%) and 34% of millennials said that they plan to apply for new credit or refinance existing credit within the next year, TransUnion said.
Read more: Which demographic has the highest mortgage delinquency rate in Canada?
This demographic trend was also apparent in the willingness to spend. In the past three months alone, 22% of Gen-Zers said that they have increased their discretionary spending, a far higher share than millennials (12%), Gen-Xers (11%), and boomers (5%).
“We’re seeing an imbalance in consumer demand for lines of credit, auto loans, and mortgages, with younger individuals demonstrating that they are more ready than older generations to increase their spending,” Fabian said. “As the economy reopens, it remains to be seen what Canadian spending levels will look like given pent-up demands and a surplus of cash, but we expect Gen-Z and millennial consumers to continue leading the way on credit demand and spending.”
