Following reports that younger Canadians are willing to make sacrifices to own a home, insolvency trustees say many should consider renting instead. 

Rob Kilner, an insolvency trustee with Spergel, said in a news release on Wednesday that many younger Canadians should choose to rent. He said he sees a lot of “entitlement” among younger people as salaries have not kept pace with inflation and rising home prices amid higher interest rates. 

“Someone will say ‘I deserve a house by myself.’ Well, sometimes you can’t afford a home by yourself. You might need a roommate,” he said. 

“You now have a younger generation who are paying astronomically high living expenses. They are taking the beating the most. It’s almost like the older generation took up the ladder with them, and said ‘good luck climbing the wall.’” 

In January, digital real estate platform Wahi released findings from its Homebuyer Intention Survey with results from 1,508 Angus Reid Forum members, finding that 24 per cent of Canadians between 18 and 34 indicated they are likely to buy a home this year. The survey found those individuals said they were willing to make sacrifices like reducing spending, working longer hours or taking a second job to purchase a home. 

Samantha Galea, also an insolvency trustee at Spergel, said in a statement that she recommends people change their attitudes toward home ownership. 

“People need to shift the idea that to be successful you have to own a home. It’s just not going to be in the cards for some people, and they’re in a worse position for trying to own a house,” she said. 

Last week, a survey from Houseful, an RBC company, found that younger first-time home buyers were making compromises to get into the real estate market. Some of the trade-offs included looking for smaller and smaller homes, purchasing homes they may not stay in over the longer term and expanding their preferences on location. 

The survey found that 65.2 per cent of younger first-time buyers would embrace a smaller space compared to 47.2 per cent of older buyers. Fewer younger buyers, 53.3 per cent, indicated they purchased their dream home, while 72.6 of older buyers indicated they did. 

Additionally, younger buyers were also less likely to value location, with 28.3 per cent of younger buyers prioritizing this compared to 34.9 per cent of older buyers. 

Generational wealth 

As the cost of owning a home continues to rise in Canada, one economist says many may not be able to attain a primary driver of accumulating wealth. 

Earlier in March, Carrie Freestone, an economist at RBC, said in a report that renters are facing barriers to building wealth as they are forced to allocate more of their income to shelter. 

“I will say that if we look at wealth accumulation, homeownership has been the primary driver of wealth accumulation in Canada,” she said in an interview with BNN Bloomberg. 

“It's accounted for half of the assets accumulated over the past three decades. So it is concerning that renters are not having access to the housing market.”