One in five young, urban homeowners in Canada say they have delayed saving for retirement to help them buy a home, according to a new survey released Wednesday.
Besides reducing non-essential lifestyle expenses – such as dining out, travel and clothing purchases – pushing back a retirement savings plan was the second-most common strategy that young Canadians took to attain homeownership in urban centres, according to the report by Sotheby’s International Realty Canada.
The report, conducted with market research firm Mustel Group, is based on a survey of 1,743 homeowners between the ages of 20 and 45 in Vancouver, Calgary, Toronto and Montreal.
“The dream of home ownership remains compelling for today’s young families, but the reality is that many are facing serious obstacles to achieving this given rising costs of living, rising costs of housing, and other financial needs, such as saving for retirement,” said Brad Henderson, president and CEO of Sotheby’s International Realty Canada, in a release.
“In an environment of higher interest rates and tighter mortgage guidelines, today’s families will continue to confront new challenges as they make home-buying decisions in this year’s market.”
The survey also found that while 71 per cent of young, urban homeowners used personal savings for their down payment, 52 per cent said they relied on financial gifts or an inheritance. Thirty-one per cent said they borrowed from RRSPs.
Meanwhile, most young homeowners appear to believe their strategies are worth it: 78 per cent of respondents said they believe their home will either outperform or match the performance of their financial investments in the next five years.
The Sotheby’s survey was conducted from Aug. 9 to Sept. 6, 2018.
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