With interest rates and home prices at historic highs, the majority of Canadian millennials have delayed purchasing a home, according to recent survey data.

Real estate brokerage Zoocasa surveyed over 1,600 of its readers last month on their housing preferences and plans for the future. It found that 62 per cent of respondents were currently or had recently delayed buying a home.

GENERATIONAL DIVIDE

When broken down by generation, the survey found that 67 per cent of millennials, 70 per cent of Gen Zers and 69 per cent of Gen Xers have chosen to delay a home purchase, compared to 46 per cent of baby boomers.

The two most common reasons cited for delaying the purchase of a home were rising interest rates and high home prices.

Despite the challenges that many homebuyers are facing, demand remains strong, Zoocasa noted.

The survey found that 66 per cent of respondents were looking to buy a home in the near future, but those buyers were not likely to enter the market until interest rates start to come down.

Roughly the same percentage of respondents said they plan to wait at least a year before buying a home, as rates aren’t expected to be lowered until the middle or end of 2024.

Lauren Haw, broker of record and industry relations officer at Zoocasa, told BNN Bloomberg that despite the majority of millennial respondents saying they’d delayed making a home purchase, more than half of Canadian millennials already own a home.

“It’s really the sentiment of moving up from that condo to maybe a townhouse or a detached house, or those that are looking to still enter the market; it’s a mix of the two,” Haw said in a television interview on Tuesday.

WILLING TO RELOCATE?

Across the board, homebuyers are finding it difficult to save up enough money for a down payment, and Haw noted that Canadians appear willing to move further from their preferred destination to purchase property they can afford.

Thirty one per cent of Gen X respondents said they would consider moving to another city or province to buy a home, compared to just 26 per cent of millennials and 22 per cent of baby boomers.

Haw said it remains to be seen if people will act on that sentiment and relocate to a more affordable housing market.

“We’ll see now that we’ve got this ‘higher for longer’ interest rate amongst us if people are actually going to make the move, or is it just right now kind of saying they would,” Haw added.

“We obviously need jobs to follow. Some people have the benefit of working from home but a lot of people would actually need to move their employment as well as their homes.”

‘THE BANK OF MOM AND DAD’

The survey found that almost half of millennial and Gen Z respondents said that in order to purchase a home, they’ll need financial assistance from relatives, compared to just 28 per cent of Gen X respondents and 10 per cent of baby boomers.

Haw said that based on her experience working with millennial and Gen Z clients in the Greater Toronto Area, she expected that number to be even higher.

“Anecdotally, working in the GTA with clients, the number is nearly all when it comes to who is getting help from the bank of mom and dad,” she said.

“If not on their move-up purchases, potentially on a first purchase previously … you’re pretty hard-pressed to find millennials or anybody younger that buy their first home and sometimes even their move-up home without help.”

METHODOLOGY

The survey was conducted between September 8, 2023 and September 29, 2023. 1,634 Zoocasa blog readers and newsletter subscribers across Canada were surveyed, and the survey consisted of 32 multiple-choice questions to learn about the current real estate outlook of Canadians. The margin of error is roughly two per cent.

For the purposes of the survey, Zoocasa determined the age ranges of the different generations mentioned based on Statistics Canada's definitions which are as follows: those born between 1997 and 2012 were classified as Gen Z, those born between 1981 and 1996 as millennials, those born between 1966 and 1980 as Gen X, and those born between 1946 and 1965 as baby boomers.