Posthaste: Canadian dream of owning a home is fading for a whole generation
Poll after poll has shown that homeownership is important to Canadians.
Yet for many millennials and gen z that dream is fading because of a “perfect storm” of challenges that is making it harder for them to get on the property ladder than previous generations.
“Once a key milestone on the journey to adulthood, homeownership has become increasingly elusive, particularly for millennials and gen z,” said Sebastian Mintah in a new report from Moody’s Analytics.
Since it peaked in 2011, homeownership in Canada has been falling steadily. As a result, renter households grew at twice the pace of owner households over the next decade, “reflecting the growing challenge many Canadians face in achieving one of the core tenets of the Canadian dream, homeownership,” he said.
The higher interest rates and inflation over the past few years have been a big part of that challenge.
According to the Royal Bank of Canada, higher borrowing costs have shaved 22 per cent off aspiring homeowners’ budgets since the first quarter of 2022, when the Bank of Canada began hiking interest rates. Home prices, meanwhile, are down just 1.8 per cent.
“It’s no wonder homebuyer demand has cooled so much,” said RBC assistant chief economist Robert Hogue in a recent report. “The ability of many Canadians to get into the housing market has greatly diminished.”
Moody’s identified this “surprising trend” in 2021 census data. People aged 25 to 39 in the prime first-time buyer age range, not only had the lowest homeownership rate, but also suffered the most significant decline of all age groups since 2011.
It’s natural for the younger age group to have lower homeownership because they have had less time to build wealth and assets. But this generation has also been
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