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A new generational trends report released today by <\/span>Mustel Group<\/span><\/a> and<\/span> Sotheby\u2019s International Realty Canada<\/span><\/a> reveals that even in light of escalating costs of living and rising housing prices nationwide, an overwhelming majority of Generation Z buyers are self-reliant in saving for their first homes, and are employing diverse strategies to overcome financial obstacles to home ownership. <\/span><\/p>\n
According to Mustel Group and Sotheby\u2019s International Realty Canada survey results, 37% of urban Canadian Generation Z adults expect to purchase their first home in less than five years, while 43% anticipate buying between five and ten years from now, including nearly one-third (29%) who expect to purchase in five to eight years. 30% expect the purchase price of their first home to be $350,000\u2013$499,999, while 26% expect to pay $500,000\u2013$749,999. A previously released report by Mustel Group and Sotheby\u2019s International Realty Canada had revealed that approximately half of this cohort state that their most likely first home purchase will be a higher-density housing type, with 25% reporting that their first home purchase will likely be a condominium, 18% saying that their first home will be an attached home\/townhouse and 7% stating that their first home purchase will be a duplex\/triplex. 39% reported that they are most likely to buy a single family home as their first residence.<\/span><\/p>\n
Newly released findings reveal that the most common source of funds for their down payments will be personal savings, with 67% of urban Canadian Generation Z adults reporting this as a primary source. This is followed by a financial gift from family (25%), a loan from a financial institution other than a mortgage (24%), sale of financial assets such as stocks and bonds (18%) and receiving a family inheritance (16%). <\/span><\/p>\n
The Mustel Group and Sotheby\u2019s International Realty Canada \u201cFinancing the Future of Canadian Housing: Generation Z Trends Report\u201d focuses on the financial strategies and sentiments of the country\u2019s next generation of first-time home buyers as it relates to home ownership. It is the second in a multi-part report series based on Canada\u2019s first in-depth study of the housing intentions, aspirations and preferences of Generation Z, and is based on a survey of 1,502 Generation Z Canadians who are over the age of majority and between the ages of 18 and 28 in the Vancouver, Calgary, Toronto and Montreal Census Metropolitan Areas. <\/span><\/p>\n
\u201cThe influence of Generation Z is rising with each passing year, and their impact on Canada\u2019s real estate market is set to be substantial,\u201d says Josh O\u2019Neill, General Manager of Mustel Group. \u201cResults from this survey reveal the high level of confidence that young Canadians have in housing and demonstrate how they are overcoming financial barriers to attain home ownership.\u201d <\/span><\/p>\n
Of the personal and financial measures this group plans to take to save for their first home, the most common, mentioned by 51% overall, is to secure a full-time job with a higher salary. This is followed by reducing or eliminating personal spending (42%), earning extra income through a second job (41%), and reducing or eliminating eating out (37%). Other measures include living with family (30%), reducing or eliminating vacations (29%), delaying having a child (28%), and reducing or eliminating entertainment, health, or fitness expenditures (25%). <\/span><\/p>\n
A noteworthy segment of Canada\u2019s Generation Z is also anticipating an alternative ownership structure for their first home. While freehold, full ownership is the most likely structure for a first home purchase, reported by 41% of respondents, 24% of urban Canadian Generation Z adults expect to co-own their first home with family, while 13% expect to co-own with friends or other parties who are not family. Those living in Toronto and Vancouver are more likely to report that their first home will likely be co-owned with family or friends. <\/span><\/p>\n
Across every metropolitan area, survey results also reveal a high degree of confidence in the real estate market. Overall, 83% of urban Canadian Generation Z adults agree that home ownership will play a major role in achieving a financially stable retirement, including 40% who \u201cstrongly\u201d agree with this sentiment. 71% believe that a home purchase will perform the same (32%) or better (39%) than financial investments such as their RRSPs and TFSAs.<\/span><\/p>\n
\u201cEven though Canada\u2019s Generation Z homebuyers are confronting significant housing affordability concerns, it is clear that they not only desire home ownership, but regard it as being integral to their financial security and planning,\u201d says Don Kottick, President and CEO, Sotheby\u2019s International Realty Canada. \u201cMany amongst this resourceful generation are planning their first real estate move and are taking major steps and making considerable sacrifices to save for their first down payment. With one in three Gen Z adults expecting to buy their first home within the next five years, we can only expect the social, economic and political clout of this group to have a growing influence on the Canadian housing market.\u201d <\/span><\/p>\n