The dream of homeownership is strong among millennials
Nicole and Matt have two small children. Matt is a welder and Nicole works in a salon. Two years ago, while Nicole was pregnant with their second child, they decided it was time to start looking for a home.
They searched REALTOR.ca for their perfect starter home.They needed a few bedrooms, some space for the kids to play in the yard and, ideally, a garage for Matts welding side jobs. They called a REALTOR, spoke with a mortgage broker and made a decision.
Home ownership was not affordable for them at that time. They moved into Nicoles parents house. Not how you expected that story to end, is it?
Unfortunately, this is the reality that many millennials (born between 1981 and 1996) face in Canada today. In research released in October of 2018, conducted by Abacus Data on behalf of the Canadian Real Estate Association (CREA), housing ranked as the top priority for Canadian millennials.
In fact, 86 per cent of Canadian millennials who are not homeowners want to own a home someday and 68 per cent of those are passionate about it.
So whats stopping them? In the survey, millennials stated that saving enough for a down payment, the cost of carrying a home with monthly mortgage payments and mortgage interest rates were the top three factors that impacted their ability to enter the housing market. Saving a down payment was listed by 47 per cent of millennials as the top issue that affects their ability to buy a home.
Researchers also asked millennials what impact recent housing policy changes had on their decisions to enter the housing market. The results were shocking, with more than 60 per cent feeling that interest rate increases and government decisions that make it more difficult for people to get a mortgage have had a negative impact on housing affordability.
There is a clear desire from Canadian millennials to achieve the dream of homeownership. Most millennials want to own a home and will be looking to our elected leaders for progressive policies to make those homes affordable.
Recently, proposals from the Nova Scotia Association of REALTORS (NSAR), in conjunction with the Canadian Real Estate Association (CREA), have been implemented by the federal government to improve affordability. In March of 2019, the Home Buyers Plan (HBP) was increased to allow first-time buyers to borrow up to $35,000 from their RRSP towards a down payment.
But more can be done to provide meaningful assistance and allow more Canadians to enter the housing market. In the 2019 election, millennial voters will make up the largest portion of the electorate at 37 per cent. With such a large portion of voters identifying as millennials, housing affordability is expected to become a prominent election issue.
That idea sits well with Nicole and Matt, who are still living in her parents basement apartment looking forward to purchasing their first home sometime very soon.
- Contributed by NSAR
NSAR is the professional association for more than 1,500 REALTORS in Nova Scotia.
Employment fell by more than one million in March
Employment fell by more than one million in March (-1,011,000 or -5.3%). The employment rateor the proportion of people aged 15 and older who were employedfell 3.3 percentage points to 58.5%, the lowest rate since April 1997.
Of those who were employed in March, the number who did not work any hours during the reference week (March 15 to 21) increased by 1.3 million, while the number who worked less than half of their usual hours increased by 800,000. These increases in absences from work can be attributed to COVID-19 and bring the total number of Canadians who were affected by either job loss or reduced hours to 3.1 million.
The unemployment rate increased by 2.2 percentage points to 7.8%, the largest one-month increase since comparable data became available in 1976. Unemployment increased by 413,000 (+36.4%), largely due to temporary layoffs. In addition, the number of Canadians who had worked recently and wanted to work, but did not meet the official definition of unemployed, increased by 193,000.
Forecast Update: Economies Shutting Down
Rapidly evolving developments necessitate an update to the forecasts we published just last Friday. Additional quarantine or shut-down measures have been put in place in a number of countries in the last few days. As a result, we now anticipate global GDP growth to be 0% in 2020, followed by a sizeable rebound in activity in 2021 given our view that economic activity will rebound quickly once the virus is no longer a serious threat to public health. At present, we believe activity will begin to return to normal in the third quarter, except in countries where containment measures were aggressively deployed in the first quarter (essentially the Asian economies), where activity resumes in the second quarter. In Canada, the closure of non-essential business in Quebec and Ontario announced earlier this week will have large economic consequences. At present, we believe Canadian economic activity will fall by 28% in Q2 as these measures are felt. If other provinces follow, the fall in Q2 economic activity would be in the 35% range. We now assume that economic activity resumes by the start of the third quarter and that growth rebounds sharply at that time. However, the 20% drop in US economic activity in the second quarter will restrain the rebound in Canadian activity in the third quarter owing to the usual lags between US and Canadian economic outcomes. Under these assumptions, Canadian GDP would fall by slightly more than 4% in 2020 and rebound by 5.1% in 2021. Though we have not included any additional measures in this update beyond those already announced, we believe a substantial ramping up of fiscal support measures in Canada is forthcoming. There is a chance that aggressive virus management measures are required beyond Q2 to ensure the virus is truly well-contained. Evidence in Asia this week suggests that even in countries where aggressive management measures have been put in place, COVID-19 can come back quite quickly. If measures in Canada are not lifted by the end of Q2, growth would fall again in Q3, and GDP would fall by 6.3% in 2020 instead of the 4.1% we currently expect. A key question for forecasters is the length of the virus-related restrictions on firms and households. As noted above, a shift of one quarter in the resumption of normal operating conditions can have a large impact on growth outcomes. Since we do not have a good handle on the ultimate length of the interruptions, we consider it more informative to assign probabilities to the time at which virus containment measures end. At this time, we believe there is a 75% chance that activity resumes by Q3 and a 25% chance that activity returns to more normal levels by Q4. How officials manage virus containment internationally, as well as the evolution of the virus, will inform our assessment of probabilities going forward.
Source: Scotiabank Economics