A large number of young adults in Ontario are delaying buying their first home due to the crushing weight of their student loan debt.
Forty percent of post-secondary graduates have put off purchasing property because of their student loans, while 23% have delayed moving out of their family home.
The findings are courtesy of a new poll from the Ontario Real Estate Association, which surveyed 1,500 grads between the ages of 20 and 44, half of whom have some level of student debt. It was conducted by Abacus Data in the summer of 2023.
At 62%, the majority agreed that their student debt will make it "much harder" for them to save for the purchase of a home. The figure rises to 80% amongst those who owe over $5,000.
Sixty-nine percent of respondents believe they will need to pay off their student debt before they can buy a home, and 67% said they don’t, or won’t, make enough money to afford both.
While 43% of grads have saved more than $10,000 for a downpayment, only 29% of those with debt have been able to do the same, and 36% have saved nothing.
But, despite the financial pressures, the dream of homeownership is still very much alive, with 76% of respondents indicating they’d like to purchase property someday. However, just 29% are optimistic about their ability to do so in their desired community, while 41% are either pessimistic or have given up on the belief altogether.
"Student debt is not merely a financial burden; it’s the biggest barrier to the Canadian dream of homeownership for many young Ontarians and their families," said Tim Hudak, CEO of OREA.
"Our research shows that the weight of student loans contributes greatly to the housing affordability crisis which, if left unaddressed, will lead to fewer young Ontario homeowners. All levels of government and industry need to work together to bring affordability home to Ontario graduates."
Said affordability crisis is worsening, rapidly — 93% of respondents believe that the cost of living is more expensive than it was two years ago. Compared to six months ago, 65% said they were paying more for the cost of housing.
Due to the ever-rising expense of living in Ontario, 42% of those surveyed are considering leaving the province for somewhere more affordable. The figure rises to 47% among Toronto residents.
"I've witnessed firsthand the power of homeownership and the transformative impact it has on communities across the province," said Tania Artenosi, President of OREA.
"Student debt casts a shadow over this dream, leaving aspiring buyers caught between their educational ambitions and the desire for a place to call their own. We need to work to empower the next generation of homeowners, and that starts with pro-homeownership policies aimed at alleviating the pressures of student loan debt."
Unsurprisingly, grads "overwhelmingly support" such policies, including forgiving a portion of student loan debt for those who make below a certain annual salary, and forgiving a portion of debt when someone makes a contribution to the First Time Home Savings Account. Increasing education on student loans and the repayment process also received a great deal of support.