Thanks to family help, younger Canadians feel more prepared to buy a first
home than parents and grandparents did
TD Canada Trust Generational Homeownership Study reveals a shift in home buying behaviour
Young Canadians aged 18-34 are more likely to feel they are financially ready to buy a house than their parents and grandparents were when they were purchasing their first home. What is motivating this belief? The TD
When asked what prompted them to consider buying their first home, just over half of younger Canadians (51%) said they felt financially ready compared to 37% of older Canadians 55+ when they were thinking of buying their first home. However, over a third of younger Canadians 18-34 (36%) said they could not have afforded their first home without help from family (compared to 16% of those 55+), and 27% said that they received money as a gift or borrowed from family/friends to put towards the purchase of their first home (compared to only 10% of those 55+).
Younger Canadians are buying older homes in urban centres
Location is the most important factor in buying a home for many younger Canadians. Seventy-eight per cent of those 18-34 years-old said that location was a top priority and 70% of Canadians ages 35-54 years-old agreed, compared to 64% of Canadians 55+. Sixty-four per cent of younger Canadian adults purchased their first home in a city, more than the older generations polled (35-54: 55%, 55+: 50%).
Buying a house even in the city is still preferred over condos or townhouses. Both younger Canadians (18-34) and Canadians 55+ revealed that their first real estate purchase was a house (65% and 88% respectively). For many younger Canadians life in the city also means older homes - almost half (48%) of Canadians 18-34 chose a house over 21 years old for their first home and 35% chose a home they planned to fix up (compared to 24% of 55+).
"A lot of people assume that younger Canadians buying their first home in a city would naturally choose the affordable condo option, but this study shows that this isn't the case," says
First Home Priorities
When today's Canadians 55+ bought their first home, paying off their mortgage was a top priority; more important than it is to today's younger homebuyers. Today, less than half of young Canadian adults (49%) agree that paying off their mortgage is a first priority, compared to 64% of Canadians over 55.
But for Canadians across all generations, their home is their biggest investment. Eighty-eight per cent of Canadian adults 18-34, 87% of Canadians 35-54 and 78% of 55+ all agreed that their first home was an investment for the future. Sixty-four per cent of younger Canadian adults 18-34 said that they put all their savings into their first home compared to 62% of Canadians 55+ and 54% of Canadians 35-54.
The research revealed that when it comes to getting a mortgage, young adults tend to shop around more than their older counterparts did. Sixty-two per cent of older Canadians were loyal to their own bank and received financing where they were already a customer, compared to 36% of younger homeowners who were more likely to shop around and take recommendations.
"There are so many different options available now, and easier access to information with the use of the internet, that it's no wonder today's first time homebuyer shops around a bit more," added Wisniewski. "It's a great idea to look around and see what's available. 30 years ago when people were looking for financing, they usually had limited choices. Now there are many options to explore with your bank including a variety of fixed rate mortgages, variable rate mortgages, and even green mortgages for buyers who want to lessen their footprint on the environment."
HIGHLIGHTS OF TD CANADA TRUST POLL FINDINGS: - 36% of younger Canadians 18-34 said they could not have afforded their first home without help from their family - Over half (51%) of younger Canadian adults 18-34 were considered to buy their first home because they felt financially ready compared to 37% of those 55+ - Almost a third of those 18-34 felt their first home was more expensive than they initially planned for (36%) while only 18% of older Canadians said that their first home was more expensive than they initially planned for
ABOUT THE TD
The 2009 TD
About TD Bank Financial Group
The Toronto-Dominion Bank and its subsidiaries are collectively known as TD Bank Financial Group. TD Bank Financial Group is the sixth largest bank in
For further information: Tashlin Hirani, TD Bank Financial Group, (416) 982-3375, [email protected]
Share this article