Describe the challenges that young graduates and professionals face with purchasing their first home in Canada
Hello! Thanks for your question about the challenges that young graduates and professionals face with purchasing their first home in Canada. The short version is that many young Canadians are struggling to purchase their own homes independently and often have to rely on borrowed money from their parents and family members. This is, in part, due to the high levels of student debt they have accumulated throughout their studies and the rise in part-time jobs, which make full-time employment and job security an increasing scarcity for many millennials. Below, you will find a deep dive of my findings
To answer your question I have reviewed a number of trusted media sites and industry reports in order to present you with quantitative data regarding the challenges faced by young Canadians in purchasing a home. As requested, the information has been provided as a list of stats that you will find useful.
HOME PURCHASES AND THE CHALLENGES FACED BY YOUNG CANADIANS
Edmonton millennials account for 29.5% of the population and earn higher incomes than their Vancouver counterparts.
Canadians between the ages of 28 and 34 are the wealthiest generation in Canadian history with an estimated net-worth of $93,000 per adult, but many young Canadians are still struggling due to student debt and their inability to find stable income.
Forty-seven percent of millennials feel financially overwhelmed due to high levels of student debt and harsh employment realities.
The unemployment rate of Canadians between 15-to-24 years-old is more than 12%, almost two times higher than that of the general population.
While Canada's economy grew 1.3% in 2016, Alberta's economy shrank by 3.8% having an adverse effect on employment.
In 2015, employed males between the ages of 17-to-24 experienced a 15% decline in the buying power of their salaries, while women in this group experienced a 10% decline.
Between 2012-2015 an estimated 720,000 households held close to one-fifth of Canada's $400 billion household debt.
In 2016, Canadian house prices peaked at almost four-and-a-half times the average household's disposable income.
The combination of rising home prices - with the average home worth $470,297 - and decreasing full-time job prospects makes it increasingly difficult for young Canadians to save for a home.
Of the 1,000 Canadian millennials polled in a recent HSBC survey, just over a third owned their own home, of which 37% were only able to purchase their home by borrowing money from their parents, and 42% overspent on their home purchase.
A BMO survey suggests that 65% of young Canadians who purchased a home relied on their parents or family members to help them with 10% of the purchase price.
First-time homeowners are usually highly-indebted borrowers who are more vulnerable and highly likely to lose their jobs in the event of a downturn.
To wrap it up, some Canadian millennials are earning much more than the previous generations in their age bracket and are able to purchase homes; however, this is not the case for all. Many young Canadians are struggling to find full-time employment that will give them enough money to save for their first home purchase. Others continue to struggle with high levels of student indebtedness.
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