From inflation to higher interest rates, Canadians have faced financial hurdles in the past few years and they may be feeling concerned about their futures and ability to get ahead.
A report released Wednesday from Statistics Canada shows there have been disparities between wealth and debt among Canadian households and among those under 35, some are feeling the pinch between the debt they have and what they can do to achieve stability. But StatsCan warns that the shift away from homeownership being seen by younger Canadians could pose potential risks to people wanting to improve their financial status and wealth, with ongoing barriers posing risks to socioeconomic mobility.
University of Toronto Rotman School of Management marketing professor David Soberman told Global News homeownership has often been seen as a financial benefit.
“When you actually buy a home, the capital gains on your home are exempt from tax because it’s your primary residence. And so in a sense, there’s a certain unfairness in that because people who are renting don’t get that same advantage,” he said.
“This is one of the reasons that buying a home, even if it’s not actually a standalone house, but a condominium or a townhouse, has always been an important starting point for people to increase their wealth and improve their standard of living.”
According to StatsCan economic analyst Carter McCormack, when looking at barriers to the housing market there’s multiple factors involved in affordability. This can include the cost of the first downpayment, the ability to service the debt, the interest and ability to save.
Soberman said the hope is struggles like inflation and high interest rates are temporary. But, he notes, governments will need to take action to get inflation fully under control, and to improve the housing market so Canadians don’t feel like they’re having to pinch pennies to get ahead.
By Sean Previl – Global News
Summarized
Kelly MioBertolo,
Mortgage Agent
Mortgage Alliance
