There have been many predictions that Canada’s housing market is about to take a dive as the Baby Boomers sell their houses. According to a Reuter’s poll:
- Canada’s housing market boom will fade out over the next three years and although analysts say prices won’t fall from record highs most are at least somewhat worried about the risk of a crash.
- Most respondents in the poll said that homes in Canada are overpriced, particularly in Toronto and Vancouver.
- 5 analysts who predicted outright declines in home prices saw a median 12.5%.
You would think that this would be perceived as good news by Gen Y who have been essentially frozen out of a market too rich to buy into. But, sadly that’s not the case. Why can’t Gen Y buy homes even if the housing market begins to cool?
- Student debt is approximately $27,000 (BMO)
- 42.3% of people aged 20 to 29 are living with their parents (up from 27% in 1981) (Statistics Canada)
- The unemployment rate for young adults was double the national rate at 13.9% in January (Statistics Canada)
- There’s a serious problem of youth underemployment (Statistics Canada)
- 14% of people with federal student loans have defaulted within 3 years of leaving school (CIBC)
The reality is that with the financial struggles that Gen Y is experiencing, they can’t possibly save enough for a down payment or afford the carrying costs of a home. This in turn creates a huge problem for Baby Boomers who according to a recent survey by Sun Life Financial, see their house as their main source of income in retirement. As you can see Gen Y’s problems are all of our problems. As parents, what can we do to start our kids off in life without a mountain of debt that will hinder them through adulthood and cause a ripple effect to other generations as well? We offer a variety of customized insurance products designed to help families achieve their financial goals. Contact us today and let us show you how.