Barely half of Canadian millennials think they will ever be able to afford a house, according to a new poll.
A survey conducted by advisory firm KPMG revealed that only 54% of millennials expect to be able to afford a home one day, which could mean a big drop from home ownership levels of previous generations.
The survey also found that 65% millennials worry if they buy a home and delay their savings, they won't have enough saved for their retirement. Another 42% are putting their retirement savings on hold to pay off or down their mortgage, and almost two in five (38%) millennial homeowners believe they paid so much for their house that they're afraid that by the time they want to retire, they won't get the same price or more for it.
The poll surveyed 2,500 Canadians, including 1,000 millennials between the ages of 23 and 38.
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“The financial future for millennials is vastly different from that of previous generations," said Martin Joyce, partner, national leader, human & social services at KPMG. “They face unique challenges when it comes to building wealth despite having more education and income, primarily because of housing unaffordability. While Canadians generally believe home ownership is essential for a financially stable retirement, most millennials feel times have changed and they can't rely on their home to be a viable nest egg like their parents have.”
According to Joyce, the reality of soaring house prices and high levels of personal debt has many millennials giving up on the idea of owning a home as their parents did.
“What we are seeing is that millennials face a choice today that their parents' generation didn't,” he said. “They either buy a home or focus on saving for retirement. Buying a home involves taking on considerable debt because house prices are so high in relation to incomes, and that limits millennials' ability to save. While most feel home ownership is an investment for financial stability, they worry their home will be worth less in the future.”