Statistics Canada has published a new economic and social report, entitled Housing wealth and debt: How are young Canadians adapting to current financial and housing pressure? In it, Statistics Canada’s researchers provide an overview of household balance sheets where primary earners are under 35 years of age.
The research found that disposable income is up in young households and savings has increased 9.2 per cent in 2023. At the same time, however, debt servicing costs have increased markedly, with young households reporting that they spend 10 cents of every dollar earned on debt servicing, up from seven cents in 2022.
Barriers to life cycle milestones
“Barriers to important life cycle milestones and transitions have intensified in Canada,” the Statistics Canada report states, adding that housing continues to be critical for wealth creation. Despite this, concerns over rising prices have led one third of those under 35 to reconsider buying a home or even moving to a new rental. “Younger households are starting to turn away from the housing market, as their overall mortgage balances have declined in recent quarters. While total mortgage liabilities grew by $73-billion on a year-over-year basis in the third quarter of 2023, households where the primary earner is under 35 years of age were the only age cohort to reduce their mortgage burden.”
Down payment gifts
Citing CIBC Economics research, they say that down payment gifts have become increasingly important for first time homebuyers.
“In 2021, the share of first-time buyers that received help from family members was just under 30 per cent, up from 20 per cent in 2015; during this period, the value of the average gift rose from $52,000 to $82,000,” they state. “The financial realities of those with limited access to parental supports may contribute to heightened inequality, particularly if important sources of wealth accumulation, such as owning a home, are delayed or become inaccessible.”
