7 In 10 Canadians Still Want To Own A Home But Can’t Afford To

In a recent survey conducted by the Canadian Imperial Bank of Commerce (CIBC), it was found that despite concerns about affordability, homeownership remains a significant goal and a source of pride for many Canadians.

The aspiration to own a home also ranked high among non-homeowners, with 71% expressing a desire to own a property. However, concerns about inflation and rising interest rates weighed heavily on the minds of mortgage holders (82%) and renters (64%), who fretted about their ability to meet mortgage payments or keep up with rising rental costs.

The poll revealed that 63% of respondents with children at home intend to assist their kids with a down payment in the future, with 79% expressing worries about their children’s future home affordability.

“Many Canadians recognize that homeownership could be out of reach for their children, unless they have help with a down payment,” stated Carissa Lucreziano, Vice-President of Financial and Investment Advice at CIBC. “Being able to help your children save for a home is a great gift, however, you need to be aware of how it can impact your own finances such as effectively managing your cash flow, paying down your own debt or saving for retirement.”

Interestingly, the survey revealed that current homeowners are not looking to move anytime soon. Sixty-six percent of homeowners stated they are likely to stay in their homes longer than expected, with 40% considering selling their properties once economic conditions stabilize.

Only 31% of respondents claimed to be in their “forever home.” Additionally, 30% of homeowners expressed a likelihood of taking advantage of the newly available multi-generational home renovation tax credit over the next five years.

Waiting for the rates to drop

In a related survey, BMO’s Real Financial Progress Index revealed that more than two-thirds (68%) of Canadians intend to wait until mortgage rates fall before purchasing a home.

A majority of Canadians (68%) also believe that purchasing a home is more out of reach for them than it was for their parents. Gen Z (ages 18 to 24) is the most likely to have this attitude (71%), followed by younger Millennials (ages 25 to 34) at 69% and older Millennials (ages 35 to 44) at 65%.

Reflecting on their house purchase decisions, some homeowners expressed regret about the timing. Thirty-seven percent wished they had bought their homes when mortgage rates were lower, and 30% wished they had sold their properties during the recent housing market peak.

The survey also shed light on the preferences of first-time homebuyers, with 59% opting for previously owned homes, 15% purchasing pre-construction homes through builders or contractors, 15% acquiring previously owned condominiums, and 7% opting for pre-construction condominiums through builders or contractors.

Chasing the dream

Despite concerns, prospective homeowners in Canada are actively taking steps to save for their dream homes. The most common actions include reducing spending (37%), setting a monthly budget (33%), delaying major expenses (31%), adjusting home-buying expectations (23%), and working overtime or taking extra jobs (22%).

When it comes to funding a down payment, 55% plan to use funds from a regular savings account, 28% plan to utilize their Tax-Free Savings Account (TFSA), 22% intend to use proceeds from the sale of their existing homes, and 25% plan to tap into their Registered Retirement Savings Plan (RRSP) funds through the Home Buyers’ plan. Additionally, 16% plan to receive a gift or loan from a relative.

On the rental front, while 46% of renters feel more capable of paying their rent than they did a year ago, 64% worry about their ability to keep up with future rental costs.

As homeownership continues to be a cherished aspiration among Canadians, concerns about affordability persist, motivating families to plan ahead and support their children’s dreams of owning a home in the future.

Information for this story was found via CIBC, BMO, and the sources mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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