Only 18% of young Canadians putting off buying a home due to current debt load

Recently, Angus Reid Institute, in partnership with the Globe and Mail, released the results of a new public opinion poll about Canadian debt. 

A few of the key findings include the fact that 89% of Canadians think “it’s stupid to go into debt if you don’t need to,” but 76% are in debt. Only 16% say their debt is difficult to manage and 39% say their debt is significant but manageable. 

While there is a lot of other interesting data presented, like how debt is causing financial strain on 40% of all Canadians, what stood out to us the most was all the information on millennials and their homeownership data.

With lower salaries than baby boomers, higher education costs, and soaring rent and housing prices, millennials collectively owe a lot of money. But that doesn’t seem to be getting them down. Only 18% of Canadians under the age of 40 years are putting off buying a home due to debt load, and just 5% are delaying moving out of their parent’s home. When looking specifically at age 26-37 years, 37% are putting off buying a home, which is a more significant figure. 

When it comes to specifically mortgage debt, 51% of Canadians aged 37 years and under owe less than $250,000. The higher the mortgage amount, the lower the percentage of young Canadians, with 25% owing between $250,000 and $500,000, and 11% owing between $500,000 and $750,000. 

The remaining 13% do not have a mortgage. We find this interesting because the results say that all the respondents for this question are homeowners, so 13% of young Canadians just full out own their homes. This sounds high to us!  

It’s important to note that just because the mortgage debt is lower doesn’t mean young Canadians have built up a lot of equity in their homes. It more likely means they are buying less expensive homes. When asked about the value of their equity, 42% of homeowners aged 37 and under estimated less than $250,000.   

A result that was not shocking at all was that 44% of homeowners aged 18 to 37 years had help from parents and family members to buy their first home. What’s actually more shocking to us is that 31% of those aged 38 to 55 years also had help. And everyone seems to think it’s just millennials that need help from their parents. 

Despite all this, young Canadians in debt remain optimistic about the future. Many expect to retire earlier and have a better retirement lifestyle than their elders, despite having little savings. Is this a sign of naivete? Wishful thinking? Or are millennials actually more prepared than we think? 

“How young Canadians plan to achieve this expected level of comfort in retirement is an open question,” reads the report. “Though relatively few Canadian millennials currently have more than $25,000 saved, most in this generation who expect to retire say they will do so using their own retirement savings, rather than money from the government or an employer. Older respondents, meanwhile, are more likely to anticipate funding their retirements through government or work pensions, and place less focus on personal savings or investments.”