More than half of young Canadians believe it makes sense to put their real estate plans on hold until next year, according to a Royal Bank of Canada (RBC) home ownership study published Thursday.
The study found 55% of young Canadians plan to buy homes next year, compared with 45% of respondents overall who felt the same way.
The No. 1 reason why young Canadians are delaying their purchases? Mortgage costs.
According to the study, 46% of young homeowners say their mortgage is using up too much of their income, despite an environment of record-low mortgage rates.
“In a more balanced housing market it makes sense that younger and first-time homebuyers are waiting to assess all of their options and do their research before buying a home,” said RBC’s Bernice Dunsby, director of client acquisition and home equity.
“It’s also important to get expert advice on what you can afford and leave yourself with a little extra wiggle room in your budget so you don’t become house-poor.”
RBC’s study comes two days after RE/MAX reported that young buyers were driving growth in real estate sales across the country (see “First-time buyers driving real estate sales growth” – BIV Business Today; April 5).
That growth is, in large part, due to buyers who want to take advantage of low mortgage rates.
Although the Royal Bank study found young Canadians are delaying purchases for now, far more plan to snap up real estate in the next two years when compared with other age groups.
Approximately 43% of Canadians aged 18 to 34 want to buy in the next two years, compared with a national average of 29%, the study found.