Housing in crisis: 3 in 4 Canadians who want a house, can’t afford one
June 16, 2021
Manulife Bank Debt Survey reveals homeownership out of reach
Seven out of 10 Canadians (71%) who do not own a home worry about saving up for one, including as many as four in ten (39%) who worry a lot about this.
One-third (33%) of homeowners admit they needed help from their parents when purchasing their first home:
This includes nearly half of Generation Z (47%) and,
Millennial homeowners (46%).
Three-fifths (61%) of Canadians surveyed report that the cost of living for their household has increased
TORONTO - Home ownership is now out of reach for about three-quarters of Canadians, as housing prices reach a record high and continue to rise, according to Manulife Bank’s bi-annual Debt Survey.
Housing prices have hit an all-time high and are rising in all corners of the country with no end in sight, making home ownership increasingly difficult for many Canadians. Three-quarters (75%) of those who do not own a home want to own one but can’t afford to. Two-thirds (67%) worry about housing prices in their local community, suggesting they believe they might have to move to another community if they decide they want to buy a new home. Seven out of 10 Canadians (71%) who do not own a home worry about saving up for one, including as many as four in ten (39%) who worry a lot about this.
“With the housing market pricing many Canadians out of the market, younger generations are forced to turn to their parents to close the gap,” said Rick Lunny, President and CEO, Manulife Bank. “Although this can be an effective short-term solution, it can actually be exacerbating the problem. That’s why it’s so important to have financial flexibility, especially when it comes to purchasing a home, no matter the financial environment.”
The housing crisis has been well-documented, and data from the Manulife Bank Debt Survey underscores that housing affordability is a major issue for Canadians. The results also suggest that the cost of living might be rising too fast.
Three-fifths (61%) of Canadians surveyed report that the cost of living for their household has increased, over the past year and very few (7%) think the cost of living for their household has decreased. This finding suggests that wages might not be keeping up with inflation, which might be of some cause for concern.
Who has been able to enter the housing market? While Generation Z and Millennials are much more likely to report having purchased a new home during the pandemic, many note they owe it to their parents. Indeed, nearly one in ten (7%) parents have helped their adult children purchase a home during the pandemic. As many as five percent (5%) of those who have a mortgage used equity from their own home to help their adult children purchase a home.
Looking to the next generation, well over four in five (85%) of those who have young children are worried about the future affordability of real-estate, when their children are ready for home ownership. It is also noteworthy that more than half (51%) of Canadians with mortgages worry about making their mortgage payments and one-third (33%) of homeowners admit they needed help from their parents when purchasing their first home, a figure which includes nearly half of all Gen Z (47%) and Millennial (46%) homeowners.
“Our survey findings show 72 per cent of Canadians admit they do not have a written financial plan and just one-third (35 per cent) of those who are in debt have established a strategy to repay their debts,” said Lunny. “Identifying where your money goes, finding ways to save more, and minimizing your current spending can help you feel more in control of your money matters to achieve larger goals like home ownership.”
Learn more about the Manulife Bank of Canada Debt Survey and ways to manage finances by visiting: www.manulifebank.ca/debtresearch
About the Manulife Bank of Canada Debt Survey
Now in its eleventh year, the Manulife Bank of Canada poll surveyed 2,001 Canadians in all provinces between ages 20 and 69 with household income of more than $40,000. The survey was conducted online by Ipsos between April 30 and May 4, 2021. National results were weighted by gender, age, region, and education. This survey has a credibility interval of +/- 2.5 per cent 19 times out of 20, of what the results would have been had all Canadian adults between the ages of 20 and 69 been surveyed.
About Manulife Bank
Manulife Bank is one of Canada’s original digital banks. Since our launch in 1993, we’ve been designing efficient, flexible products that fit seamlessly into our customers’ lives to help make their decisions easier and lives better. Today, Manulife Bank has over $27 billion in assets and serves clients across Canada in all provinces and territories.
About Manulife
Manulife Financial Corporation is a leading international financial services provider that helps people make their decisions easier and lives better. With our global headquarters in Toronto, Canada, we operate as Manulife across our offices in Canada, Asia, and Europe, and primarily as John Hancock in the United States. We provide financial advice, insurance, and our global wealth and asset management segment, Manulife Investment Management, serves individuals, institutions, and retirement plan members worldwide. At the end of 2020, we had more than 37,000 employees, over 118,000 agents, and thousands of distribution partners, serving over 30 million customers. As of March 31, 2021, we had CAD$1.3 trillion (US$1.0 trillion) in assets under management and administration, and in the previous 12 months we made $31.3 billion in payments to our customers. Our principal operations are in Asia, Canada, and the United States where we have served customers for more than 155 years. We trade as 'MFC' on the Toronto, New York, and the Philippine stock exchanges and under '945' in Hong Kong.
