Is homeownership becoming out of reach for younger buyers?

Buying a home is a huge investment at any stage of our lives. But given how much property values have risen in British Columbia over the last few decades, for younger buyers, the idea of owning a home of their own can sometimes seem like a pipedream that’s destined to remain permanently out of reach.

In a 2024 poll by Scotiabank, for example, more than half of all Gen Z and Millennials who were surveyed said they felt that buying a home had become essentially “unattainable.” But in spite of the challenges, 58% of Canadians aged 18 to 43 still said they were determined to buy a property within the next five years.

The truth is, while today’s real estate prices can be a big hurdle for younger buyers, there are many different tools and strategies available that can help. The following are a few tips to help Gen Z, Millennials and other first-time buyers buy their first home in B.C. – and get their foot on the first rung of the property ladder.

Tip #1: Take advantage of government incentives

First, take advantage of all of the government grants, rebates and incentives that are available to help younger and first-time buyers.

From the First-Time Home Buyers’ Tax Credit and the B.C. First-Time Home Buyers’ Program to savings tools like First Home Savings Accounts and the federal Home Buyers’ Plan, these programs can provide hundreds of thousands of dollars in funding or support to help buyers purchase their first property.

Tip #2: Ask a family member for help

For some younger buyers, purchasing a property might mean going to the “bank of mom and dad” for help.

According to a recent report by CIBC, approximately 30 percent of first-time homebuyers in Canada received financial assistance from their parents to help with a down payment. In Vancouver, the average amount of those gifts was close to $180,000.

If you’re self-employed, just starting out in your career, or work in the freelance gig economy, asking a family member to co-sign a mortgage could also make it a lot easier for you to obtain financing – and possibly even make the difference between getting a no or a yes from your lender.

Tip #3: Get flexible with financing

Thanks to recent changes in Canada’s mortgage rules, younger and first-time buyers can now also consider getting a 30-year mortgage on eligible properties.

Compared to a traditional 25-year mortgage, 30-year mortgages give you more time to pay back the loan, which can reduce your mortgage payments by several hundred dollars a month or more.

Plus, while older buyers might balk at the prospect of a 30-year amortization, one big advantage younger buyers have is that they’ll likely have more time to pay off their mortgage. There’s also a good chance you’ll be earning more in five or 10 years than you do now. So you may be able to pay off that 30-year loan sooner anyway, if your goals and circumstances allow.

Tip #4: Get creative about what owning a home means

Many younger buyers are also getting more creative these days about what the idea of homeownership can actually look like. For instance, instead of looking for a standalone home or focusing exclusively on the most popular neighbourhoods, you might consider buying a condo or choosing a community that’s a little less central for your first property.

Other options could include exploring rent-to-own models,  co-ownership plans, or other non-traditional paths to homeownership to lower your upfront costs, pool your finances with friends or family members, and buy your first property sooner than might otherwise be possible.

Tip #5: Let your home help pay for itself

Finally, consider all the different ways you can use your home to generate some income you can put towards everything from mortgage payments and property taxes to the cost of a renovation.

Instead of purchasing a single-family home or townhouse, for example, buy a duplex or triplex and rent out the other unit(s). If you’re buying a house, consider adding a laneway home or turning the basement into a separate rental suite.

If your property is eligible, you could also turn to sites like Vrbo or Airbnb for occasional income, or as a regular way to help defray costs.

Questions?

Curious to find out how you can make your dream of homeownership a reality? Contact us today for a free consultation.