Despite the improvement of federal rules promoting access to housing, it is increasingly difficult for first-time buyers to save for a down payment.
According to a report published Tuesday by Point2Homes, generation Z, which includes the majority of twenty-somethings, would be the most penalized.
Unless you are buying speculatively with a view to reselling, it is always better to set aside 20% for a down payment without CMHC insurance.
This allows interest payments to be reduced, and the property to be used as a savings vehicle. For people who earn a fixed salary, this is often the best option.
On the other hand, the rapid increase in housing prices in recent years, which has not been accompanied by an equivalent increase in wages, makes this objective more difficult.
Rather discouraging
The report calculates a savings rate corresponding to 20% of salary. This is ambitious and unrealistic at the start of your career, when the salary is often low. For those struggling with student debt and sharply increasing rents, it is even “mission impossible,” explains the report.
Moreover, the survey reveals that only a third of young Canadians manage to put such an amount aside each month.
Among the cities analyzed in the study, the median down payment for a first property is nearly $70,000. Even saving 20% of a $45,000 salary, it will take 8 years to get there.
Depending on the region, building a 20% down payment will take a first-time buyer from Generation Z a little over 7 years in Quebec, 14 years in Montreal, and up to 40 years in Markham, Ontario.
In this city, the average value of “entry-level” homes is $677,600.
Wait and invest elsewhere
The report states that it is easier to save a down payment later in life, when the salary is higher. The study concludes that Generation
Unfortunately, the preference towards property seems to be much stronger among generation Z, than among generation to save using other types of investments.
Given the scale of the challenge, Generation Z could also consider investing in ways other than housing.
A regional bonus?
One thing is certain, the time needed to save and access property is a more realistic dream outside of major centers. The Point2Homes study focuses on metropolises, but a trend emerges: smaller towns are more affordable.
In Quebec, according to a study published by $500 on the North Shore.
Could the solution to our problems of access to housing be geographical?
Related News :