Millennials are facing significant affordability challenges, but they definitely haven’t given up the dream of home ownership. HSBC’s annual “Beyond the Bricks” survey shows that 34% of Canadian millennials own their own home, and 83% intend to buy within the next five years, although slow salary growth and increasing home prices will make that goal extremely challenging for most.
The main barrier to buying a home: not enough money saved for a down payment. According to the non-profit housing advocacy organization Generation Squeeze, millennials take an average of 13 years to save the 20% down payment on a median-priced home, while their parents needed just around five years to do so in 1976.
The HSBC survey showed that many millennials are willing to make sacrifices to own a home, including:
- Spending less on leisure activities
- Buying a smaller-than-ideal house
- Buying in a less preferred location
- Delaying children
- Renting out space in their home, such as a basement apartment
- Buying jointly with friends or family members
Financial help from parents was a factor for 37% of millenials who purchased a home, and 21% moved back home to save for a down payment.
Of those Millennials who bought a home within the past 2 years, 42% overspent their budget, mainly due to renovation and furniture costs.
In some ways, home is even more important to millennials than it was to their parents’ generation: 50% of millennials work from home, and 29% would like to, as compared to 33% and 16%, respectively, for baby boomers.