Zoocasa
Real Estate Sold Prices
Calculator
Map
Property Trends & Insights
  • Blog Home
  • For Buyers
  • For Sellers
  • Real Estate News
  • Mortgage News in Canada
  • Free Guides (PDF)
  • Real Estate Infographics
  • Real Estate News
Zoocasa
Home Guest Posts

Study: It Takes 5 – 27 Years to Save a Down Payment in Toronto

Point2 Homes by Point2 Homes
September 24, 2018
in Guest Posts, Toronto Real Estate
3 min read
Why do property owners need a will
Share77
Tweet
Share
77 Shares

Following a nationwide survey of over 9,000 home seekers, Point2 Homes discovered that 64 per cent of the young potential homebuyers in Toronto would like to buy their own home in less than a year.

However, the study also shows how Millennials’ expectations come into conflict with their budgetary realities: 24 per cent of the Gen Y survey takers have savings under $10,000 and 12 per cent of them stated that they hadn’t managed to save anything at all at the time they were taking the survey.

This is probably happening because Millennials tend to underestimate, in some cases by a significant margin, the amount they will need to cover their down payment. The Toronto real estate market exhibits less outrageous home prices than Vancouver, but Millennials here don’t have an accurate view of the market: 70 per cent of Gen Y prospective buyers think they will need under $50,000, but the average down payment in the city was $62,056 at the end of the second quarter.

Homeownership Dreams Meet Market Reality in Toronto

So how long would it take for a Millennial couple family to save for a down payment? According to tradingeconomics.com, Canadians only save 4.4 per centof their income every month, on average. Provided Millennial couples only set aside this much of their income each month, they would need no less than 21 years to save enough for a down payment in Ontario’s capital.

However, the household saving rate fell even more, reaching a meager 3.4 per cent. This means the time frame would increase to an even more unattainable 27 years.

But what would happen if Toronto Millennials were a bit more determined to move into a home they can call their own? Assuming a more driven Millennial couple set aside 20 per cent of their incomeevery month, as the 50-30-20 financial rule advises, they would save enough for the average down payment in a little under five years.

7 Canadian Markets Out of Reach for Millennials, Toronto Not One of Them

If that still sounds discouraging, a change of perspective might help: there are seven markets in Canada where Millennial couples might never afford a home. In West Vancouver, Gen Y-ers would need 35 years to save for the down payment alone and in Vancouver it would take 20 years, even if they set aside 20 per cent of their income.

In all the other 7 markets (Oakville, ON, Burnaby, BC, North Vancouver, BC, Richmond Hill, ON, and Richmond, BC), Gen Y couple families are looking at over 15 years of savings just to cover the down payment for the average home.

Toronto’s average saving time is nowhere near that, but it still discourages many Millennials from trying. High home prices are an issue, but low incomes definitely contribute to and deepen the problem, a fact that becomes apparent in the Greater Toronto Area as a whole. The majority of the cities here post an average income for Millennials of $67,880, with only Oshawa and Clarington Millennial couple families making an average of $88,320 a year. The combination of income and lower home prices make these two GTA cities some of the most affordable for Millennials (it would take Gen Y-ers approx. one and a half years to save for their down payment here, if they set aside 20 per cent of their income).

On the upside, nine of the 40 most affordable cities for Millennials are in Ontario, with Timmins being the most Millennial-friendly city when it comes to homeownership opportunities. The other cities are Sault Ste. Marie, Chatham-Kent, Thunder Bay, Greater Sudbury, North Bay, Sarnia, Cornwall, and St. Thomas.

In these cities, as well as a few others around the country, Millennial couples who are striving for a shot at homeownership have a real chance of reaching their goal with a little careful planning, as all these cities have average saving time frames of under one year.

Toronto is one of the markets where Millennials have a real shot at becoming home owners and, given its attractive business scene and amazing lifestyle options, it’s no wonder young professionals find it so appealing.

Previous Post

Lessons from San Francisco: Will the Toronto Tech Boom Hurt Housing Affordability?

Next Post

These Are the Most Affordable Housing Markets in Ontario

Point2 Homes

Point2 Homes

Related Posts

Affordability

Rent or Buy? Average Monthly Rental Prices vs. Monthly Mortgage Payments in the GTA

August 10, 2022
Buying a Home

Condo Apartments Remain the Most Affordable and Second Most In-Demand Property Type in Toronto and GTA: TRREB

August 4, 2022
Affordability

The Most Expensive and Affordable Homes Sold in July in the GTA

July 29, 2022

Blog Search

No Result
View All Result

Recent Articles

Rent or Buy? Average Monthly Rental Prices vs. Monthly Mortgage Payments in the GTA

August 10, 2022

Should You Purchase a Home With an Open Floor Plan?

August 8, 2022

Condo Apartments Remain the Most Affordable and Second Most In-Demand Property Type in Toronto and GTA: TRREB

August 4, 2022

Your Home’s Screen Appeal: How to Stage Your Home for Photos and Videos

August 3, 2022

Rent or Buy? Average Monthly Rental Prices vs. Monthly Mortgage Payments in the GTA

August 10, 2022

Should You Purchase a Home With an Open Floor Plan?

August 8, 2022

Condo Apartments Remain the Most Affordable and Second Most In-Demand Property Type in Toronto and GTA: TRREB

August 4, 2022

Your Home’s Screen Appeal: How to Stage Your Home for Photos and Videos

August 3, 2022

The Most Expensive and Affordable Homes Sold in July in the GTA

July 29, 2022

Where Can You Buy a Home on a Single-Income in Canada in 2022? [REPORT]

July 28, 2022

Newsletter Sign-up

Join a community of 130,000+ subscribers. Don't miss important real estate news, market data, and buying and selling tips.

Social Media

Featured Listings (Updated Weekly)

The Most Expensive and Affordable Homes Sold in July in the GTA

July 29, 2022

The Most Viewed Homes in June 2022

July 22, 2022

Condos for Sale with Amenities in the GTA

July 11, 2022

Hidden Gems for Sale in Kitchener Under $500,000

July 4, 2022
first-time home buyer programs and rebates

About Zoocasa

Zoocasa.com is a full-service brokerage that offers advanced online search tools to empower Canadians with the data and expertise they need to make more successful real estate decisions.

Newsletter Sign-up

Join 130,000+ weekly subscribers. Don’t miss important real estate news, market data, and buying and selling tips: sign-up here.

Social Media

Zoocasa Tools

MLS Listings Canada
Search Sold Listings
iOS App
Android App
Find an Agent
Contact Us

  • Homes & Real Estate Properties
  • Terms of Use
  • Privacy Policy
  • Contact Us

© 2015 - 2022 Zoocasa Realty Inc., Brokerage

  • Blog Home
  • For Buyers
  • For Sellers
  • Real Estate News
  • Mortgage News in Canada
  • Free Guides (PDF)
  • Real Estate Infographics
  • Real Estate News
No Result
View All Result

© 2015 - 2022 Zoocasa Realty Inc., Brokerage