Almost half of Canadian renters -- 45% -- will either continue renting indefinitely or aren't sure when they will buy real estate.
A recent survey from Canada Life reveals that current market conditions are changing people's home ownership plans. Renters cite lack of cash, fear, and uncertainty as reasons they’ll likely remain tenants.
The survey finds that high real estate prices are not only preventing many renters from entering the housing market, but they're also causing current homeowners to feel house poor.
"Canadians are at an investments crossroads," says Paul Orlander, Executive Vice-President, Individual Customer, Canada Life. "While buying a home can help you build equity that could be valuable to one's long-term financial plans, renting may provide more peace of mind around affordability, flexibility, and lower housing costs which could leave more for savings and investments each month."
Almost three-quarters (73%) of respondents say it's a bad time to buy a house, with renters citing their top three reasons for not getting into the market as high real estate prices, lack of money for a down payment, and not having enough income to qualify for a mortgage. While 79% agree home ownership is a good investment, 64% say they think new homeowners won't be able to break into the market unless they have financial support from others, like a family member.
Like other recent research, the Canada Life survey revealed -- unsurprisingly -- that Canadians aged 25-29 are two times more likely never to purchase a home or continue renting indefinitely compared to those aged 30-49. But that’s not to say everything is perfect for the homeowners; 24% of homeowners say they feel house poor today.
Of those who have provided financial support towards a down payment, almost half say their savings (43%) or ability to invest (48%) have decreased, and about one-in-three will need to modify their retirement plans (24%) or postpone home renovations (32%).
“Home ownership is one of the most important investments in one's lifetime and with the right advice and long-term planning, a plan to build home equity should be one that is within reach for first-time homebuyers in Canada," said Hugh Moncrieff, Executive Vice-President, Advisory Network and Industry Affairs, Canada Life. "Whether renting or buying, an advisor can help you plan for whichever works best for you. They can help you build an effective investment strategy, explain the long-term value of real estate within that strategy, knowing your first home isn't always your forever home."
