Nearly half of Canadian tenants intend to remain tenants indefinitely: survey

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Nearly half of Canadians who rent out their homes say they will continue to do so indefinitely and are not sure when they will be able to enter the housing market, according to a new survey.

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Renters polled by insurance company Canada Life cited a lack of cash, fear and insecurity as reasons they stay away: Nearly 73% said now is not the right time to buy a home, and 17% said they would never buy one. .

91% of tenants surveyed believe that every year it becomes more difficult to buy a home, and 89% expect that the next generation will find it even more difficult to enter the housing market.

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While 79% of respondents consider homeownership a good investment, 64% believe they will not be able to buy a home unless they receive financial support from other people such as family members.

The survey, conducted May 5-11, also found that Canadians aged 25 to 29 were twice as likely to continue renting indefinitely as those aged 30 to 49.

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However, the housing market is showing signs of cooling: according to the latest data from the Canadian Real Estate Association (CREA), home sales in May fell by almost 22% compared to last year and by almost 9% between April and May. The nationally seasonally adjusted average home price for May was $711,000, down nearly 5% from April.

But that doesn’t mean renters feel any more confident in their ability to buy a home, as runaway inflation and rising interest rates are impacting the availability of funds, said Paul Orlander, executive vice president of individual clients at Canada Life. .

“These factors are likely to make Canadians continue to see homeownership as an increasing challenge,” he said in an interview.

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Current homeowners are also under pressure, with 24% of those surveyed saying they feel poor.

As the Bank of Canada continues to raise interest rates, homeowners may find themselves in even more trouble as mortgage payments rise.

The central bank, which is due to make its next interest rate decision on July 13, has signaled that it is open to larger increases if necessary. Meanwhile, Canadian inflation jumped to 7.7% in May, according to Statistics Canada.

Whatever decision Canadians make about homeownership will affect wealth accumulation and retirement plans.

While the purchase creates capital that can be valuable in the long run, homeownership and the cost of maintaining a home could actually crowd out Canadians’ ability to save money for retirement, Orlander said.

On the other hand, renting can provide more flexibility and keep free cash flow for savings and investments every month that can go into retirement, he added.

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