Nearly one third of younger Canadians have had to postpone or deprioritize buying a home since the beginning of the year, according to a new survey.

The survey, commissioned by Royal LePage and conducted by Leger, asked 1,565 participants if “the increased cost of living, including higher interest rates and inflation,” caused them to “postpone or deprioritize the purchase of a home since the beginning of 2022.”

Twenty nine per cent of respondents between 18-34 answered ‘yes,’ while 31 per cent responded ‘no’ and the remaining 40 per cent said they had no plans to purchase a home since 2022 began.

“I would suspect that this group may be waiting to see where pricing in tandem with interest rates settles out, then I do think you'd see those buyers potentially coming back into the market,” Karen Yolevski, Chief Operating Officer of Royal LePage Real Estate Services, told CP24. “They'll take some time now, continue adding to their down payment, continue saving funds for closing costs and things like that. What we're seeing now is driven largely because of cost of living increases and the increase in borrowing costs.”

The bank of Canada has increased its target for the overnight lending rate from 0.25 per cent to 3.25 percent so far this year, significantly inflating the cost of borrowing.

This has in turn led to a drop in housing prices nation-wide over the past six months, with RBC previously warning of a historic housing correction.

However, the higher interest rates have made it more difficult to qualify for a mortgage, which is already a challenge for young and first-time home buyers, experts say.

The latest data provided by the Toronto Region Real Estate Board suggests that the average selling price for all home types combined in September was still up by 0.9 per cent year-over-year to $1,079,500.

Meanwhile, many economists predict that Canada is headed towards a recession in 2023.

David Doyle, the head of economics at Macquarie Group, an Australia-based global financial services provider, told BNN Bloomberg that the cooling housing market and rising inflation are signs that a recession is “almost inevitable.”

"Typically, you see housing start to weaken as you head into a recession," Doyle said. "We're certainly seeing ample signs of that."

It isn’t just young people who have changed their plans when it comes to buying a home this year.

Nineteen per cent of all survey respondents answered ‘yes’ to the survey question, however more than half of all respondents (54 per cent) said that they had no plans to purchase a home since the beginning of the year.

Yolevski says that in expensive housing markets like Toronto and the GTA, there simply isn’t a lot of inventory right now, which is another reason why some buyers may be staying on the sidelines.

“There's not a lot for sale in the GTA,” Yolevski said. “Usually what happens is when interest rates rise and prices feel some downward pressure, inventory rises, but we're not seeing that in this cycle.”

Yolevski also said that the rental market in the GTA is only getting more expensive, forcing many people to make tough decisions about whether to buy or to rent.

“Prices are going up monthly in the GTA for rent and people are perhaps looking at that math and determining what makes more sense,” she said. “If you're looking at renting, and you have a [mortgage] pre approval that is at a rate that you can sustain on a monthly basis, you may look at that and say it's more advantageous for me to buy. There's so few units available, and the rents are quite high right now.”

Yolevski says that for those aspiring home-buyers in the 18-34 age bracket, the best advice is to save for a down payment and to seek professional help.

“Do your homework,” she said.

The survey was conducted between Sept. 9 and 11 via a web panel. No margin of error can be associated with a non-probability sample, such as a web panel.