Market Memo: The luxury of home ownership - November 2024

  • First National Financial LP

More than 4 in 5 Canadians feel that buying a home has turned into a luxury.  At the same time, the vast majority of Canadians also believe homeownership supports communities, the economy and the middle class.

Those, seemingly conflicting, assessments come out of the latest Housing Affordability Survey by Habitat for Humanity. 

Anxiety Crosses the Generations

The third annual survey suggests 84% of Canadians say buying a home feels like a luxury while 88% of renters say the goal of buying a home has moved out of reach.  And the mood crosses the generations: 

  • 82% of Baby Boomers
  • 86% of Generation X
  • 87% of Millennials
  • 84% of Generation Z 

agree that buying a home is a luxury.

The survey also suggests Canadians see broader personal and societal issues that come from a lack of affordable housing.  While 58% agree that there is still a “middle class” in Canada, 82% worry that it is shrinking because of a lack of affordable housing.

  • Almost 80% agree that the inability to own a home is contributing to the “wealth gap”
  • Nearly three-quarters believe communities are fracturing because of inadequate housing for low and middle-income earners

Tougher for Younger People

Among Millennials and Gen Z, housing limitations have them making difficult choices:

  • 44% of Gen Z and 40% of Millennials say they have fewer job options because they had to move to a more affordable area
  • 29% of Millennials and 25% of Gen Z say they would consider leaving the country in order to buy a home
  • 66% of Gen Z and 48% of Millennials have considered delaying starting a family because they cannot afford a suitable home

Emotional Toll

There are also worries about personal toll on hopeful homebuyers:

  • 59% worry about foregoing food, clothing and other essentials in order to pay their mortgage or rent
  • 41% believe the stress of not being able to buy a home is difficult for them to manage
  • 39% of home owners say the cost of their mortgage is affecting their mental health and well-being

Desire Remains

Still, the desire for home ownership remains strong, and for all of the traditional reasons: 

  • Stability
  • Stronger financial future
  • Stronger ties to the community
  • Better educational prospects
  • Better opportunities for future generations

Benefits of Ownership Remain

Much of that logic is supported by the latest financial security survey from Statistic Canada.

It shows that families that owned their principal residence, but did not have an employer-sponsored pension plan had a median net worth of $914,000, while families with an employer pension plan, but did not own their principal residence had a median net worth of $359,000.

Younger families, whose main income earner is under 35, that owned a home saw their median net worth increase 220% to $457,100 in 2023 from $142,800 in 2019.  For the same age group, who did not own a home, the increase was just 65% ($44,000 from $26,700) over the same timeframe.

Related Articles

All articles