Young Canadians avoid buying houses, have less wealth: StatCan

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Recent data from Statistics Canada shows that the youngest households in Canada saw their wealth fall for the first time since the start of the pandemic as they avoided home purchases and reduced their financial assets.

The report shows that the average wealth of the youngest age group, in which the main earner is under 35, fell by 1.4 percent in the fourth quarter of 2021.

Meanwhile, those aged 35 and older with the highest incomes in their households increased their net worth by an average of 0.8 percent, while the country’s least wealthy households, or those in the lowest two wealth quintiles, also increased their net worth at a faster rate than the richest.

Mortgage debt, non-mortgage debt and financial assets contributed three, 4.7 and 0.8 percent respectively to the wealth of the least wealthy households, while real estate and consumer goods led to a decrease of four and 0.7 percent respectively.

Real estate values ​​changed little for the youngest age group in the fourth quarter of 2021, which StatCan says is due to younger Canadians avoiding home purchases.

The same age group also reduced their average debt by 2.8 percent, more than any other group.

However, the value of their non-pension funds, including cash in savings accounts, mutual funds and other investments, fell 3.3 percent.


The report comes as more young Canadians report that they are putting off buying homes amid record high home prices.

A poll released last week by Scotiabank found that 43 percent of Canadians are delaying their home buying plans, compared to 33 percent in 2021 and 20 percent in 2020.

An even higher proportion of young Canadians seem to be concerned about the housing market in general. Based on the survey, 56 percent of Canadians between the ages of 18 and 34 said the current economic environment has forced them to abandon their plans to buy a home, while 62 percent said they were waiting for prices to drop.

Mortgage experts also say they are seeing more family members making down payments to relatives to help cover the initial cost of buying a home.

In November, IG Private Wealth Management reported that the nation’s wealthiest families would give each of their children an average of $145,000 to help purchase their first home.


In an effort to address housing affordability challenges, the Liberal government, with the support of the NDP, will seek to pass its recently declassified budget, which is estimated to pledge $10 billion over five years to various housing initiatives. .

The federal government will seek to double the number of homes built each year to about 400,000 in the next decade to meet the 3.5 million estimated to be needed by 2031 to meet demand.

Home prices are up more than 20 percent since last year to a record $816,720 in February.

The federal government will also prohibit foreign buyers from buying homes in Canada for the next two years, with certain exceptions.

However, real estate experts have mixed feelings about how effective these measures will be. For example, foreign buyers currently make up less than two percent of the BC market, provincial housing minister David Eby said.

The Liberals will also introduce a new tax-exempt First Home Savings Account, which Canadians under 40 can use to set aside up to $40,000 toward the purchase of their first home as early as 2023.

The federal government also plans to double the first-time homebuyer tax credit to $10,000 and extend the first-time homebuyer incentive used to reduce monthly mortgage payments.

“We will make it easier for our young people to get those first keys of their own,” said federal Treasury Secretary Chrystia Freeland.


Another notable trend in the recent StatCan analysis is the diminishing wealth gap between the wealthiest and least wealthy households in Canada.

During the pandemic, the difference in the share of wealth between the two groups fell at the fastest rate on record, the federal agency says, by 1.7 percentage points compared to the end of 2019, equivalent to the total of all reductions in the 10 years before that.

StatCan said Canada’s least affluent households increased their wealth by paying off mortgages and other debt, rather than acquiring real estate or non-financial assets such as cars and appliances.

However, all households increased their debt-to-income ratio, a measure used to determine a household’s ability to service debt, which moved closer to pre-pandemic rates.

StatCan saw a notable increase in the 45-54 age group or middle-aged (9.3 percentage points) and seniors, or the over-65s (8.4 percentage points).

The debt-to-asset ratio, which can indicate the degree of a household’s financial vulnerability, remained stable in all groups until 2021.

With files from CTV News and The Canadian Press

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