Many Halifax renters face up to 13-year wait to save for a down payment, study finds
For many young people in Halifax, the dream of homeownership is slipping further out of reach.
A new study revealed that it could take some renters, particularly those in Generation Z, up to 13 years to save enough for a down payment on a home.
According to the study done by Point2Homes, young Canadians across the country are facing steep challenges when it comes to saving for a down payment, and Halifax is not an exception.
The study found that with the average home price in Halifax now around $500,000, first time buyers need to save at least $50,000 for 10 per cent down payment. However, with the current wage growth lagging behind inflation, reaching that savings goal is taking longer than previous generations experienced.
“Gen Z folks that are getting started here, they face the affordability issue the most because they haven’t been on the homeownership ride,” explained Matthew Honsberger, Royal LePage Atlantic President. “If you’ve been renting or just moving out at this point, then you’re having to find a way to come up with that money and that certainly putting more pressure on for sure.”
The Point2Homes report highlights that it could take an average of 13-years for Gen Z renters to save enough for a down payment. This timeline assumed a household is saving 20 per cent of its income.
Even Millennials, slightly ahead in their careers, are expected to need nearly 10-years of saving to afford a down payment in today’s market. Kent Mader, who recently bought a home with his partner, said they have spent years saving up, even then they still needed some support.
“As somebody who just became a homeowner in 2024, it would have been pretty hard to do without some family assistance,” said Mader.
Before the pandemic, people in Halifax were putting roughly three times less on a down payment.
“Our prices going into the pandemic would have been somewhere between $320,000- $330,000, a five per cent on that is roughly $17,000 for a down payment,” said Honsberger.
This means people now are putting down 43 per cent more to purchase a home.
While the Halifax housing market is a concern, it is part of a broader national trend. According to the report, across Canada, home prices have surged to an average of $754,700.
In major cities like Vancouver and Toronto it could take over two decades for Generation Z to save enough for a down payment. Even in less expensive cities, the wait time remains significant, with many facing a saving period of 10-years or more.
The study’s findings indicate that this is a stark different from previous generations. Baby boomers, for example, only needed about five years to save for a down payment on a home.
Recently the federal government changed its regulation which allows buyers to move to a 30-year amortization. While this used to only be the case for people buying a new construction, now it applies to any type of housing, as long as it’s a first-time home-buyer.
“It doesn’t ease the down payment burden, but it eases the monthly payment by stretching those payments over an extra five years,” said Honsberger. “Typically, first time homebuyers are younger and so you know there is more time for them to make those payments and ultimately pay that house.”
Tina Powell, MNP’s Licensed Insolvency Trustee, said that people will who do have goals to purchase a home and want to do it before 13 years will need to plan more financially.
“You’ll have to pause your other financial goals while you’re working towards your down payment. Start budgeting and tracking your expenses which will help you determine how much you’re about to set aside each month.”
For more Nova Scotia news, visit our dedicated provincial page.
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