Over the past decade, steadily rising housing costs in major cities such as Toronto have sparked concerned conversations about the viability of future homeownership for younger Canadians.

A recent report conducted by Mustel Group and Sotheby’s International Realty Canada sheds new light on Generation Z’s perspective on escalating costs of living and the prospect of homeownership. This report is the result of an expansive survey consisting of over 1,500 Generation Z Canadians between the ages of 18 and 28 in the Vancouver, Calgary, Toronto and Montreal Census Metropolitan Areas.

We’ve identified some key trends pertaining to market expectations among Generation Z Canadians and the financial strategies they intend to incorporate on their path to homeownership.

Interested in reading more about how sellers are tailoring their homes to appeal to a younger generation of buyers? Explore our blog post on the topic here. 

Generational Appetite 

Despite rising costs, many Generation Z adults are expressing confidence in housing markets. According to the survey, most Generation Z Canadians anticipate homeownership in their lifetime. However, these perspectives vary significantly in timeline. 37% of Generation Z adults surveyed expect to purchase their first home in five years or less. A slightly larger portion, 45% of respondents expect to buy their first home within five years and a decade. 

A separate 2021 survey conducted by Mustel Group and Sotheby’s International Realty Canada also found that most Generation Z Canadians expect their first home purchase to be a form of high-density housing, such as a condominium, duplex or townhome. 

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New Structures of Ownership

As costs of living continue to rise, a growing number of Generation Z Canadians are exploring alternative paths to homeownership. In markets with exceedingly high home prices like Toronto, shared or co-ownership structures are becoming increasingly enticing for young buyers. While 41% of respondents expressed the expectation of sole ownership of their home, the remaining portion anticipate dividing the investment with another party. 

According to the survey, nearly one-quarter of Generation Z Canadians expect to co-own their first home with family, while 13% expect to co-own with friends or non-family members. 

Financial Expectations

While a significant majority of Generation Z Canadians are optimistic about the prospect of homeownership, there are considerable variations in their financial strategies and expectations.  30% of survey respondents expect the purchase price of their first home to be between $350,000 and $499,999, while 26% expect a range of $500,000–$749,999.These numbers speak to the divergent nature of major housing markets within Canada. 

In addition to price expectations, respondents also varied in their financial planning. According to the survey, 67% of Generation Z Canadians intend to fund their down payment with personal savings. One quarter claimed that a financial gift from their family will significantly factor into their down payment and another 24% expressed intent to obtain a loan other than a mortgage to cover this expense. 

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Market Impact 

While the results of Mustel Group and Sotheby’s International Realty Canada’s survey offer an array of new insights, one thing is certain – the impact of Generation Z on real estate in Canada is set to be significant. 

According to Don Kottick, President and CEO, Sotheby’s International Realty Canada. “Many amongst this resourceful generation are planning their first real estate move and are taking major steps and making considerable sacrifices to save for their first down payment. With one in three Gen Z adults expecting to buy their first home within the next five years, we can only expect the social, economic and political clout of this group to have a growing influence on the Canadian housing market.” 

Looking to access Toronto’s vast luxury real estate market? Regardless of your goals, Armin Group can provide you with a sophisticated and seamless experience. Contact us.