Posthaste: ‘Forever tenants:’ Nine million Canadians have given up home ownership

Sellers can expect fewer first-time buyers on the home

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Sellers can expect fewer first-time homebuyers as more than nine million Canadians doubt they’ll ever become homeowners.

According to a new report from Finder, a comparison site, about 29 percent of adults age 18 and older have given up homeownership or have resigned themselves to being “forever renters.”

Finder’s ‘Generation Rent’ survey found that the number of people who are not interested in owning a home has risen significantly in recent years. In fact, nearly two million more Canadians report no interest in owning a home now than they did before the COVID-19 pandemic. More than five million adults (16 percent) said they were no longer interested in becoming a homeowner this year, compared to just one in ten in 2019. That’s a 60 percent increase in just three years.

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“Buying a home is an important decision that requires significant emotional and financial commitment,” said Romana King, senior financial editor at Finder, in a press release. “For many, the erosion of housing affordability coupled with rising mortgage costs means that the barriers to owning a home now seem almost insurmountable.”

The number of Canadians expecting to move from renting to buying has also fallen in the past two years. Only 10 percent of adults currently expect to buy their first home in the next five years, compared to 17 percent in 2020 – a 70 percent drop.

Another four million Canadians (13 percent) expect to rent for the rest of their lives. “Getting up the real estate ladder can be out of reach for many potential new home buyers,” King said.

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The survey results showed that attitudes towards home ownership differ between different age groups, with the youngest generation being the most hopeful. Nearly half (45 percent) of 18- to 24-year-olds said they think they will own a home within 10 years. In contrast, those between the ages of 35 and 44 were the least hopeful, with 18 percent confident they will rent forever.

“While there are significant hurdles to overcome — such as a large down payment and eligibility for loans at higher mortgage rates — it is still possible to fulfill the homeownership dream. The work to make this possible begins long before you hit the mark. “for sale” apps opens,” King says.

King added that Canada needs to help new home buyers because they are crucial to the country’s real estate market. The country’s relatively high home ownership rate has little to do with first-time buyers, as Canada ranks in the bottom third of comparable countries, according to data from the Organization for Economic Co-operation and Development.

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“It’s important to help first-time home buyers, as they are the engine of the housing market,” King said. “Whether it’s educating buyers about the sales process, helping define loan terms, implementing discounts and tax-free savings incentives, or getting the best mortgage rate for buyers – every little bit helps.”

However, the report points out that home ownership isn’t the only way to grow your wealth. “Generation Rent” can accumulate wealth by consciously managing their savings, learning how to invest and using their geographic flexibility to their advantage.

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Today’s Posthaste is written by Noella Ovidius, with additional coverage from The Canadian Press, Thomson Reuters and Bloomberg.

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