As the average price of a home in Canada soars past $400,000, the question often heard is how on earth Generation Y (those between 14 and 34) will ever be able to buy one. The answer, to a considerable extent, is the same way previous generations have. They will look to parents and grandparents to loan them much of the money. It’s not so crazy when you realize, as a Vancouver analyst says, senior baby boomers and those even older are sitting on close to $175 billion in debt-free real estate. Those wonderful forbears also already provide deposits for 40% of today’s first-time home buyers. It is also said that the “Y” people are earning more in standardized dollars than any generation before them. It should not be hard for hard-working couples to put away something. Many people are counting on a housing slowdown sparked mainly by an increase in interest rates. There is no hint from government however and the average price of a home in Canada has climbed 7.6 per cent in a year. If there is a near-term decline most are expecting a soft landing. One prediction is notable: properties in most markets are overvalued by 15 per cent or less, says Moody economist Mark Hopkins, whose view compares to the 10-per-cent over-valuation pegged by Toronto-Dominion Bank.Gen Y wondering where the money will come from
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As the average price of a home in Canada soars past $400,000, the question often heard is how on earth Generation Y (those between 14 and 34) will ever be able to buy one. The answer, to a considerable extent, is the same way previous generations have. They will look to parents and grandparents to loan them much of the money. It’s not so crazy when you realize, as a Vancouver analyst says, senior baby boomers and those even older are sitting on close to $175 billion in debt-free real estate. Those wonderful forbears also already provide deposits for 40% of today’s first-time home buyers. It is also said that the “Y” people are earning more in standardized dollars than any generation before them. It should not be hard for hard-working couples to put away something. Many people are counting on a housing slowdown sparked mainly by an increase in interest rates. There is no hint from government however and the average price of a home in Canada has climbed 7.6 per cent in a year. If there is a near-term decline most are expecting a soft landing. One prediction is notable: properties in most markets are overvalued by 15 per cent or less, says Moody economist Mark Hopkins, whose view compares to the 10-per-cent over-valuation pegged by Toronto-Dominion Bank.