A similar proportion also needed their parents' help in fulfilling their down payment requirements
Almost half of Canadian millennials admitted that they are disillusioned by their financial situation, with the disenchantment largely driven by rising home prices, mounting personal debt, and stagnant salaries, according to a new poll by KPMG.
The global accountancy firm found that while 72% of those surveyed are aiming for home ownership, fully 46% of the respondents indicated a belief that their chances of owning a home are nothing more than flights of fancy.
Moreover, 46% of those who do own homes had to depend on parental finances to fulfill their down payment requirements.
“The combination of rising house prices, high levels of personal debt, and annual incomes that are just a fraction of the cost of buying a home compared with their parents’ generation, is pushing the dream of home ownership out of reach for many millennials,” KPMG national leader for human and social services Martin Joyce said, as quoted by the Financial Post.
“This is particularly challenging in the markets of Vancouver and Toronto,” Joyce added. Both markets continue to have a lop-sided effect upon Canada’s average home sales price.
KPMG’s study noted that the debt-to-income ratio among Canadians in the 23-38 age bracket is roughly 216%, compared to the 125% among members of Generation X when they were at the same age, and the 80% among baby boomers.
According to a new analysis by the non-profit housing advocacy organization Generation Squeeze, millennials need an average of 13 years to save enough just for the 20% down payment on a new home. This is far longer than the five years that the previous generation needed back in 1976.
“That’s eight fewer years that millennials might have for saving more for their retirement,” Joyce stated. “If they do manage to save up and buy a house now and delay retirement savings, our poll finds 65% of millennials fear they won’t have enough saved for retirement.”