Pandemic Helped Pave Path to Homeownership for Young Canadians
While COVID-19 did bring a sense of uncertainty to the housing market last year, it turns out the pandemic helped pave the way to homeownership for some young Canadians.
According to a new Royal LePage demographic survey, nearly half (48%) of Canadians aged 25 to 35 currently own their home, and 25% of these homeowners purchased a property during the pandemic.
It’s clear that confidence in Canadian real estate remains strong, and, despite economic challenges related to the pandemic, young Canadians appear to be as ambitious as ever — especially when it comes to buying their own digs.
Sixty-eight percent of respondents said they plan to buy their own home in the next five years, 16% said they plan to purchase a property within the year, while 14% say they will buy within one to two years and 39% say they are looking to purchase in two to five years.
“The pandemic provided an unexpected prize for young Canadians — a path to homeownership,” said Phil Soper, president and CEO, Royal LePage.
“Mortgage rates fell to historically low levels and the competition for entry-level housing lessened. Many investors sought to divest of property as traditional renter groups such as foreign students, new immigrants and short-term renters disappeared behind closed borders.”
On a provincial level, 44% of residents aged 25 to 35 currently own their home and of those homeowners, 26% purchased a home since mid-March of last year. Among those who do not currently own a home, 68% say they intend to buy within the next five years.
Luckily, 41% of Ontarians in this age group say the pandemic has allowed them to save more, so the dream of homeownership might not be that unattainable for some.
“In many ways, the pandemic has sucked the joy out of our normally kinetic young adults’ lives. No dining out, no concerts with friends or winter escapes to the sunny south. Even retail therapy has lost its lustre when no one will see those new shoes on the next Zoom call. The silver lining is in soaring savings; unspent money that is finding its way into real estate investments,” said Soper.
COVID-19 has also made moving outside of the city more desirable for residents, with 46% of respondents saying they are interested in moving to a less densely populated area in the Greater Toronto Area (GTA).
Because it’s no secret that homeownership is expensive, especially here in the Toronto-area, where the average selling price was up by 15.5% to $967,885 in January, an increase from $838,087 in 2020.
But, thanks to low borrowing costs, increased savings, and the need for more space, fresh-faced young Canadians continue to be drawn to markets across the province and purchase a home of their own– a trend we hope will continue.