Millennials expect to spend $350,000 on their first homes

A slight majority (51%) of Canadian millennials own their homes and, of those who rent, 76% expect to buy within the next five years, finds a survey by BMO.

But affordability is a major concern for these first-time buyers.

Read: More millennials plan to purchase a home

As housing prices continue to rise, millennials are striving to save enough for a down payment. But 29% don’t think they’ll ever be able to afford a home.

Millennials surveyed expect they will have to spend $350,000, on average, to buy their first home. These amounts range from about $235,000 in Quebec to more than $478,000 in British Columbia. To make such a purchase, respondents indicated that they expected to raise about 15% of the purchase price for their down payment – or an average of $52,500. Most (65%) indicated they would rely on parents or other family members for as much as 10% of the purchase price, although most don’t know.

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Of those who are currently renting, 64% are trying to save until they have enough for a down payment on a home. One fifth are planning to buy with someone (such as a partner, friend or relative) so it’s more affordable.

In addition:

• 60% are having difficulty saving for a house that meets their wants;
• 25% are waiting for housing prices to drop, and another 37% are concerned about rising real estate prices; and
• 42% said it’s hard to find an affordable home in their desired location.

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Further, a recent RE/MAX poll found that 78.5% of Canadians aged 18-34 agree that owning a home is attainable. Further, 37% expect help with their down payment from a family member or friend. Of those who are expecting help, 60% anticipate that it will come from their parents.

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.