With the cost of real estate in Canada continuing to skyrocket, many Canadian millennial and Gen Z buyers are considering alternative methods of breaking into the housing market.
According to RE/MAX’s 2021 Housing Affordability report, one in three Canadian home buyers (33 percent) are pursuing alternate methods when it comes to buying a home.
Some of these options include renting out their primary home (21 percent), combining funds with friends or family and working out a living arrangement with a friend or neighbour.
“It’s promising to see Canadian buyers deploying their ingenuity to be able to buy a home, but we must address the urgency of the underlying affordability problems, which are predominantly systemic,” said Elton Ash, regional executive vice president at RE/MAX of Western Canada, in the study.
The survey goes on to state that 42 percent of Canadians consider the current cost of real estate to be a significant barrier to entering the housing market, an increase of four percent compared to last year. Other factors include potential buyers not receiving an expected salary (26 percent), not having full-time employment (16 percent), overall debt (11 percent) and not performing as well as expected during a mortgage stress test (11 percent). Some respondents are also concerned with being “house poor” (18 percent) if they purchase a home slightly out of their financial reach.
Those that participated in the survey that can afford homeownership (56 percent) are typically over the age of 35 (64 percent) and live in a rural (70 percent) or suburban area (60 percent) and earn over $80,000 a year (74 percent). In terms of those that said they could not afford a home (41 percent), respondents were between the ages of 18 and 34 (60 percent) and live in a city (48 percent). These respondents also typically earned less than $40,000 per year (70 percent).
Finally, almost half of the people surveyed (48 percent) were concerned about the affordability of houses as prices continue to rise. Respondents between the ages of 18 and old were most concerned (71 percent), with 60 percent of those that participated in the survey stating that they believe a national housing strategy would improve affordability.
The online survey conducted between June 4th and 6th includes 1,359 Canadian respondents.