Canada Housing Market

As home prices continue to soar across Ontario, the prospect of homeownership becomes increasingly elusive for young renters. Despite a strong desire to own a home, many face daunting timelines—spanning years or even decades—before they can save enough for a down payment.

A new study by real estate marketplace Point2Homes highlights this challenge, revealing that while young renters are highly motivated to become homeowners, rising property prices are making that dream harder to achieve. According to the study, the national average for a starter home is approximately $350,000, which requires a 20% down payment of nearly $70,000. Yet, nine out of ten renters have far less than this saved, even though most hope to purchase a home within the next year.

How Long Will It Take to Save?

How long it takes to save for a home depends on various factors, including your city, income, and the size of the property you’re aiming to buy. Timelines for saving can range from as little as 2.5 years in some cities to over 40 years in more expensive areas like Vaughan, Toronto, and Mississauga.

For example, older Millennials in Quebec City earning the average income can save for a down payment in just over two years. However, in more costly cities like Vaughan or Toronto, young renters might find it nearly impossible to gather enough funds.

In Markham, the situation is particularly extreme, with young renters needing 40.2 years to save for a down payment. In Brampton, it would take an average renter 25.9 years to save for a starter home priced at $498,450, requiring a 20% down payment of almost $100,000.

Younger Millennials Face Long Timelines

For those aged 25-34, the situation is still difficult. In Toronto, it would take approximately 11.3 years to save for a starter home, assuming an individual income of $48,061. Similarly, renters in Mississauga face a timeline of 11.4 years, while those in Ottawa could potentially save enough in 6.1 years.

For slightly older Millennials, aged 35-44, the study found that saving timelines shorten slightly. It would take around 9.2 years to save for a starter home in Toronto, with an average income of $58,984. In Brampton, this age group would need 9.3 years, while Mississauga renters face an 8.9-year wait.

Strong Desire, Limited Savings

Interestingly, the youngest and oldest home-seekers are the most determined to buy a home, according to the Point2Homes study. Seven out of ten Gen Z buyers, along with almost eight out of ten Baby Boomers older than 65, hope to purchase a home within the year. However, these age groups typically have the lowest incomes, translating into the longest saving timelines.

Across all age brackets, 62% of those surveyed aim to buy a home within the next 12 months. Yet, nearly half of the respondents have less than $10,000 set aside for a down payment. Gen Z buyers, in particular, are the least financially prepared, with about 14% admitting they haven’t saved anything.

The Homeownership Dream: Delayed but Not Forgotten

Despite the challenges, many young renters in Ontario remain optimistic about homeownership. However, the combination of skyrocketing home prices and insufficient savings is pushing that dream further into the future for many, especially in cities like Toronto, Vaughan, and Mississauga. For some, it might take decades to turn their aspirations into reality.

Source: [Generational Study] Renters Still Want to Become Homeowners, but Saving for Down Payment Alone Would Take Decades – Point2 News (point2homes.com)