Affordability is a major hurdle to home ownership for young people today. However, despite this challenge, three quarters of adults in Generation Z cite buying a home as a goal for them, and over half of these people say they are very likely to reach this goal. In fact, 15% in the study already owned homes.
While younger adults are clearly eager and focused on purchasing homes, there is no doubt they face some challenges. These include:
- Rising prices: The cost of homes continues to rise, and young people who have yet to enter the market are contending with a constantly moving goalpost.
- Types of housing available: Some people may opt to rent so they can have a more comfortable living situation, rather than buy and be stuck with a less-than-ideal home or area. This is especially a concern for those with jobs in the city centre, or those who want to raise a family and need more space.
- Down payment: This was the barrier that impacted the most people according to the study. In Vancouver, for example, it would take the average person 36 years to save a minimum down payment for a home, assuming savings of 10% of pre-household income. This is not a realistic timeframe for obvious reasons, which is why gifted down payments from family have become increasingly common. Individuals without this option are at a substantial disadvantage.
Affordability and access to the type of housing one is seeking depends very much on the area where someone would like to live. Vancouver is seen as one of the hardest markets to break into; however, on the other hand, urban centre with the highest percentage of young (18 to 28-year-old) homeowners at 15%. Young people who are looking to secure a mortgage or family members looking to either gift or loan money to the next generation for a purchase, can benefit from speaking with a real estate lawyer about the legalities of purchasing in this environment.