A new study released by BMO Bank of Montreal has found that on average, Millennials expect to spend $350,000 on a home, and the majority of them anticipate receiving $35,000 for a down payment from their families.
As of March 2016, the average price Millennials expect to pay for their first home in Ontario is $415,110 with a down payment of 15.97%.
Other highlights include:
64 per cent of those currently renting are working on saving for a down payment.
20 per cent plan on buying with someone else, like a friend or relative, to make the purchase more affordable.
25 per cent are waiting for housing prices to drop.
51 per cent are hoping to purchase a detached home, 29 per cent a condominium, 27 per cent a townhouse, and 20 per cent a semi-detached home.
“In the 1980s and 1990s, older homes on large suburban lots were affordable options for younger buyers,” said Robert Kavcic, the senior economist for BMO Capital Markets. “Now, those properties have become relatively scarce and attract premium prices, leaving condos and townhouses as the new ‘affordable’ options.”
Sameh Elrefaei, the managing director of personal lending products for BMO Bank of Montreal, said that, “Our report revealed that Millennials certainly recognize the value of purchasing a home as a much better investment than renting, but they also appreciate that the home-buying process is heavily shaped by affordability. Setting a realistic expectation for financial help, creating a detailed savings plan and building both a before- and after-purchase budget can help determine what is truly affordable.”