Strategies to Get into the Housing Market if You’re Gen Z or Millennial

The idea of purchasing a home in this real estate market may seem impossible for millennials and generation Z Canadians.

According to the Canadian Real Estate Association, the average cost of a home in Canada as of June 2022 was $665,850, a daunting figure for those just starting or establishing their careers.

First, to figure out how to achieve your goal of affording a house, you’ll have to know where you are starting from. Figure out how much of a mortgage you can afford today. If that number is far from your goal of owning a property, here are some strategies you can try if you can’t afford the housing market, CTV News.

4 Strategies to try if you can’t afford the housing market

1: Save aggressively or longer

Saving more money is a low-hanging fruit that you can implement right away. Make a careful budget and see where you can save more money.

Focus on the top three household expenses of shelter, transportation, and food to determine where you might be overspending right now.

Alternatively, you may not need to make any sacrifices but simply save for a longer period of time. If you don’t have any wiggle room for saving, you’ll have to try another one of the strategies listed below.

2: Earn more income

This strategy will be more difficult, but with the goal of owning a home as a motivator, you can concentrate on earning more money and saving for that down payment. Perhaps you can make a company switch that pays a higher salary, or you can aim for a promotion in your current job.

We live in a more open economy than ever before, and there are countless options to earn some money in addition to your salary.

Consider using your existing skills to freelance them, participating in the gig economy, or learning new skills to earn extra money. Ideally, you should try to earn at least $1,000 more per month.

Setting high-earning goals is beneficial because even if you only earn a few hundred dollars per month, it will help you reach your goal much faster.

3: Expand Your Options

You might have to change your mind about how much house you want to buy or where you want to buy it. Instead of that three-bedroom house near downtown Vancouver, you might have to settle for a two-bedroom townhouse in Port Moody.

You could even consider relocating to a different city entirely. There have been reports of people moving from Toronto to Alberta and being able to easily afford a house.

4: Don’t Lose Hope

Many younger Canadians are losing hope of buying a property at all.

Those looking to buy real estate may find some solace in the near future. In some markets, home sales and prices are beginning to fall.

With measures such as the vacancy tax for empty homes and the foreign homebuyer tax in certain provinces, the government appears to be taking a more aggressive stance in containing price growth.

The most important factor will most likely be aggressive interest rate hikes in the near future. If home prices fall, it can happen quickly. Make sure you don’t give up hope and that you have your savings ready so you can seize the opportunity.

Renting isn’t that bad

Even if you can’t afford a house, renting isn’t the worst thing in the world. Many people believe that it is always preferable to own rather than rent. However, there are several advantages to renting rather than buying. Try not to spend more than 30% of your gross income (before taxes) on rent, which should give you plenty of room to save.

If you’re a millennial or gen Z Canadian who can’t afford a home, try to be content with renting for the time being. Consider implementing the strategies listed above, and hopefully, you’ll be able to afford the home of your dreams in the future.