Mounting costs and interest rates cited as the major driver of the trend
Elevated interest rates and rising costs of living have compelled 67% of Canadian millennials to delay their home purchases, according to a new poll by Zoocasa.
This proved to be a trend that cuts across generations, with 69% of Gen X-ers and 46% of boomers polled saying that they have put their purchase plans on hold.
Across all demographics, 62.1% of Canadians reported delayed buying a home due to multi-decade-high interest rates (29.4%) and mounting home prices (27.9%).
“Renters in particular, with nearly 50% being millennials, have faced difficulties in entering the housing market,” Zoocasa said, noting that “81.1% of survey respondents who are renters say they have delayed buying a home, and of those, the majority cite high home prices as the reason.”
RBC Economics study shows Canadian spending slowing due to debt pressures. While spending is steady, early signs of weakness coincide with a slight unemployment rate increase.https://t.co/r5amlMW8vO#mortgagenws #mortgageindustry #householddebt #economy
— Canadian Mortgage Professional Magazine (@CMPmagazine) August 11, 2023
Purchase intentions remain strong
Despite this hesitation, fully 65.9% of Canadians have said that they would still consider buying a home in the future, Zoocasa said. The most desired asset classes for prospective purchases were permanent homes (46.1%), smaller homes (16.4%), and investment properties (13.7%).
Residential purchase intentions were found to be strongest among Gen Z-ers (80%) and millennials (75%).
At the same time, the market should not count on these cohorts boosting housing sales figures any time soon.
“It’s likely that we won’t see those buyers enter the market until interest rates start to drop, which many expect will happen in the middle of 2024, as 66.5% of respondents said they plan to wait a year or longer to buy a home,” Zoocasa said.
“That sentiment was echoed pretty evenly across generations with 69% of boomers, 64% of Gen X, and 65% of millennials planning to wait a year or longer.”
