A large number of young adults are delaying homeownership in the province, citing student debt as the “primary reason” for postponing this milestone, a new poll by the Ontario Real Estate Association (OREA) suggests.
"Student debt is not merely a financial burden; it's the biggest barrier to the Canadian dream of homeownership for many young Ontarians and their families,” OREA CEO Tim Hudak said in a written statement released Wednesday.
“Our research shows that the weight of student loans contributes greatly to the housing affordability crisis which, if left unaddressed, will lead to fewer young Ontario homeowners.”
According to the poll, which was conducted by Abacus Data, more than half of post-secondary graduates who have incurred student debt or loans to pay for their education are still trying to repay that money.
On average, the report found, these graduates currently owe about $14,500.
The OREA report also found that graduates with debt greater than $5,000 agree that student debt makes it more difficult to save for a home. This has prompted some young people in the province to look for other options outside of Ontario, the report notes.
According to the survey, 42 per cent of graduates are considering leaving Ontario to move to a province with a lower cost of living and more attainable housing.
The survey also found that as a result of high housing costs, nearly half of the parents of the graduates polled said they plan to stay in their family home for the next decade.
“This will prevent more housing supply from entering the market,” the report read.
Post-secondary graduates, the report states, “still have strong aspirations for homeownership” despite the debt they carry.
About 75 per cent of those surveyed said they would like to own a residential property and at least 80 per cent of graduates support “various government interventions” to address housing affordability, the report continues.
OREA has made a number of recommendations to help reduce the burden of student debt on young Ontarians, including making adjustments to Canada’s ‘First Home Savings Account’ program to alleviate student debt for those who make contributions to this account.
The association also suggests that Ontario should “permanently eliminate the accumulation of interest on all provincial student loans,” a policy which is already in effect for federal student loans.
It is also calling on the provincial government to increase the grace period for OSAP loan repayment from six months to a year to allow students “an additional six months to obtain stable employment and save money.”
“All levels of government and industry need to work together to bring affordability home to Ontario graduates,” Hudak said.
The survey used two samples for polling, including 750 post-secondary graduates who took on student debt and 750 who did not. The survey also polled 1,500 parents of graduates of post-secondary institutions, including 750 who have children with debt and 750 who have children without debt.
The survey was conducted from June 26 to July 7 and the data was weighted by region, gender, and debt.
