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According to a new survey conducted by Global News, 6/10 (63%) of non-homeowners are now “giving up” home ownership.
“as house prices rise, inflation continues and interest rates rise,” said Gregory Jack, vice president of public affairs at Ipsos. We can see that there is a group of Canadians who have given up the idea of owning a house. ”
Opinion polls show that this sentiment is highest in BC (74 per cent), Quebec (72 per cent) and Ontario (62 per cent), but lowest in the prairie and the Atlantic region of Canada.
According to a survey of Canadians by Ipsos, homeowners say they have “given up” a very high proportion of home purchases.
In addition to regional differences, the Ipsos survey shows that owning a house is more feasible for the rich than for the poor: more than 2/3 of Canadians (67%) believe that only the rich can own their own house. 76% of non-owners hold the same view.
Although 57% of Canadians disagree that owning a home is less important than it was 25 years ago, people between the ages of 18 and 34 (49%) are more likely to agree than those over 55 (38%).
Paul Kershaw, a professor at the University of British Columbia, studied the decline in housing affordability in Canada and created Generation Squeeze to reveal the grim economic reality that separates generations.
In an interview with Global News, he said that when baby boomers reached adulthood in the 1970s, it took five years of full-time work to save 20 per cent of the down payment. Today’s young people have to work for 17 years to meet the same standard.
“as a country, we have tolerated the huge gap between rising house prices and local full-time income,” he said. ”
“this is a double-edged sword. It reduces the affordability of young Canadians and new immigrants of any age to try to enter our housing market. ”
Kershaw says Canadians have accepted the widening gap between rich and poor because for those who have entered the real estate market, the endless rise in house prices has increased their wealth. From a cultural and political point of view, we are used to the view that house prices will only rise, he says.
The Ipsos survey confirms this: 77 per cent of respondents believe that financial security is possible even if they do not participate in the real estate market, but the same proportion say home ownership is “the best investment one can make”.
Jack says that when young Canadians want to break into the hot real estate market, they first consider reality.
“I think the younger generation is thinking about where they put their money,” he told Global News. “they don’t believe they have to own a house like they did in the past.”
Robert Hogue, assistant chief economist at Royal Bank of Canada, agrees that current home buyers may have to change their expectations of what is affordable as rising interest rates reduce the purchasing power of Canadians.
He points out that fixed and variable mortgage rates have risen “considerably” since last autumn, pushing up mortgage costs for potential buyers by hundreds of Canadian dollars a month.
Hogg wrote in a RBC forecast last week that housing affordability could reach “the worst-ever” level by the third quarter of this year because of rising prices and borrowing costs.
He said that while RBC expects total house prices to fall moderately by 2.2 per cent in 2023, higher interest rates will continue to drive many potential buyers out of the market.
He believes that without a clear goal of stopping the rapid rise in house prices-not just slowing it-the wages of the younger generation will never catch up with the level at which they can bridge the gap in affordability. Unless Canadians abandon long-term savings plans based on rising property prices, those excluded from the market will remain on the sidelines.
When it comes to housing supply, international buyers are the first to be targeted, says Paul Anglin, a real estate professor at University of Guelph. But taxing them may not be effective because they do not own most of the housing in the country.