Soaring house prices and rising personal debt are making it impossible for Canadian millennials, even those with high-paying jobs, to afford a home. A new poll commissioned by KPMG confirms the opinion of industry experts.

Statistics released by the Canadian Real Estate Association (CREA) show national home sales set another all-time record in February 2021. Source:
Statistics released by the Canadian Real Estate Association (CREA) show national home sales set another all-time record in February 2021. Source:

Owning a house has always been a major life milestone, or it used to be until millennials stopped chasing it. Often judged for living in their parent’s basement way past their welcome, Generation Y has had to delay investment in real estate as the traditional model of real estate investment is working against them.  

Rising Costs, Student Debt and Complicated Process

Home prices continue to rise and so does the average age of millennials staying at home. In today’s market, young first-time homebuyers juggle student debt, rising home prices, and stringent mortgage requirements. Despite being the most educated generation, their student debt delays the time it takes to save the money for a down payment and with rising prices, the down payment required keeps increasing. While real estate is arguably the best source of passive income out there, small investors cannot enter the market because they don’t qualify for loans, don’t have stable jobs to make regular mortgage payments, or can’t arrange for the down payment. The complicated path to real estate investing is a barrier for Gen Y, who seek hassle-free and transparent processes. However, platforms like BuyProperly have curated a solution that eliminates the entry barriers to high-yield real estate investments. Learn more about owning a fractional real estate asset here.

Despite being a high yield investment opportunity, the real estate market in Canada is perceived as a pipeline dream for most millennials due to high costs and student debts.

According to a recent KPMG Study in Canada, almost three-quarters (72 percent) of millennials say that their goal is to own a home. The KPMG Millennials and Retirement poll surveyed 2,500 Canadians, including 1,000 millennials between the ages of 23 and 38 who now represent the largest population generation in the country.

  • Almost half (46 percent) of millennial homeowners, received a financial boost from their parents to buy a home.
  • Two in five (38 percent) believe their house won’t be worth as much in the future.

The data showed that millennials are earning more than earlier generations due to higher education levels. However, they are not necessarily better off. Interestingly 46% of millennial homeowners could only enter the housing market after they received a financial boost from parents. 

Purchasing a home has been the most trusted way to build generational wealth, however, it is trickier today than ever. “It seems pretty clear that millennials are in a unique situation in terms of their ability to purchase a home – which has historically been a foundation for retirement stability – and most Canadians agree that the government has a role to play in making it a more achievable dream for many of them,” says Martin Joyce, Partner, National Leader, Human & Social Services, KPMG.  You can find the report here.

A recent property curated by BuyProperly, now fully sold out and fractionally owned.

For many millennials, the idea of taking a huge mortgage right after paying off student debt feels like a debt-deja vu. Despite financial stability, Generation Y prefers to pay rent, however, a lifetime of renting means that they miss out on the opportunity to invest in the real estate market, which has been the most stable investment pool and retirement fund.

Many youngsters, save for a down payment and qualify for a loan, but lack knowledge, detest the paperwork and are wary of hidden costs and maintenance issues that might come with an impatient purchase.

Fractional Real Estate Investments

While the policies regulating the housing market and student debt is being debated, new solutions have emerged to tap into the booming real estate market. Canada has seen a boom in fractional real estate ownership, where an individual can buy or sell a part of a high-yield property online. There are many types of real estate investments, as explained here. The properties are selected after stringent due diligence and are selected to ensure high-yield returns so that a small sum can also become a long-term passive income source.

About BuyProperly

Founder of BuyProperly, Khushboo Jha was motivated to begin her own firm after she saw the obstacles in the real estate investment industry for small investors, ‘‘The recent reports are an accurate description of the situation on the ground, every day we meet with clients who have not had access to the market simply because it is designed to welcome High Net Worth Individuals only.’’ She added that ‘‘Another issue which concerns  first-time investors is the fear of putting all their eggs in one basket, that’s why we welcome small investments and help clients diversify their portfolio,’’

BuyProperly is a Canada-based online exchange, which aims to democratize real estate investing by making it accessible to everyone through fractional ownership. 

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