According to a recent survey, the majority of people who don’t yet own a home have no plans to buy a home in the next year.
A homeownership sentiment survey conducted by personal finance platform NerdWallet Inc. of 1,501 Canadians found that cost of living played a role in the lack of planning, but affordability was the main barrier.
“The market is inaccessible to first-time buyers and it’s no surprise that Canadians believe the system is broken,” said Clay Jarvis, lead writer for NerdWallet and spokesperson for Canadian real estate and macroeconomic trends.
More than 50 percent of respondents who were not homeowners did not plan to buy a home within the next year. Rising property prices and unpredictable costs were the biggest barriers to purchasing a home for 23 percent, with 34 percent of respondents belonging to Generation Z, the oldest of whom are 29 years old.
Meanwhile, respondents who already own property are more likely to plan to purchase a home, with seven percent looking to expand or purchase an investment property in 2026, according to the survey.
33 percent were worried about the amount of down payments or mortgage interest. Despite a sluggish real estate market, the Canadian Real Estate Association (CREA) predicts the national average home price will rise 1.5 per cent annually to $688,955 in 2026 and $695,094 in 2027, depending on geopolitical and economic factors. However, it varies by region, with BC, Alberta and Ontario seeing virtually no growth and other provinces seeing increases of two to five percent.
“What’s really stopping people from buying are basic financial hurdles like mortgage rates, home prices and low down payment savings. The real issue is affordability,” Jarvis said.
Of survey respondents, 28 percent said they were committed to renting, while seven percent planned to stay with relatives despite wanting to enter the market.
“As home prices rise, rents follow suit. And that means renters are dealing with higher rental costs and a larger required down payment to purchase. Rising costs of living, particularly due to higher inflation for several years, have squeezed savers’ cash flow even more,” said Jason Heath, certified financial planner at Objective Financial Partners Inc.
Jarvis said: “It’s easier to buy a home when you own one, highlighting the inequality that home ownership brings. Real estate wealth stays within families and young Canadians have difficulty building wealth for a large investment.”
Weaker buyer demand impacts sellers. According to CREA, home sales last month were 9 percent below the five-year average and nearly 19 percent below the 10-year average, although May has historically been an active month for real estate.
In the NerdWallet survey, more than four in 10 said they experience some form of regret related to homeownership. According to the survey, most regrets were due to unexpected out-of-pocket maintenance costs. Nine in 10 respondents agreed that homes in Canada are overvalued and nearly seven in 10 thought the real estate market was unfair to first-time buyers.
While the majority of respondents said home ownership was out of reach, respondents aged 18 to 34 were twice as likely to agree with this opinion as those aged 55 and over.
“We need to get back to an exuberant market so that Canadians feel confident about buying homes. Some price movement and a stronger job market would help, otherwise the piece of the pie available to people who don’t yet own a home will shrink,” Jarvis said.
“People are having a really hard time financially. If people don’t know how much they’re going to have to spend on groceries or gas next month, they’re going to have very little financial flexibility,” Jarvis said.
• Email: jlankowski@postmedia.com