There’s an article in the Ottawa Citizen about a recent study sponsored by the Bank of Montreal that found a large number of people between the ages of 30-34 living with their parents.
Adult children are returning to their parents’ homes in unprecedented numbers, with rosy dreams of saving for their own first homes — yet few are socking away enough cash for an adequate down payment, according to a recent survey.
“These kids have to get a reality check,” says Cid Palacio, vice-president, BMO Bank of Montreal, which commissioned the poll of 1,205 people, conducted by Decima Research in six Canadian cities. Ottawa was not included.
“They have unrealistic ambitions and will be chasing this rainbow of homeownership without a tangible or practical plan on how to get there.”
The article goes on to mention that in those 6 cities: Halifax, Montreal, Toronto, Winnipeg, Calgary and Vancouver the ‘stay at homes’ have an average income of $43k and have been saving about 12% of their pretax income for about 18 months. The average expectation is to have a 25% down payment in just under 4 years.
No way, says Ms. Palacio. “They should be saving twice as much money or realize it will take them eight years, not four.”
Those not living at home are saving about 10% of their pretax income. The bank suggests that “with rising house prices” potential buyers should “consider that they won’t be able to save 25 per cent of a house price for a down payment”. There is no mention of the possibility that prices will stop rising or drop as they have in the past.