Many living with parents longer because they are hoping to buy a home of their own.
Vancouver, BC – The majority of B.C. Millennials living with their parents are saving to buy their own home (60 per cent), says a new report by Vancity credit union that examines why young people are taking longer to launch.
The B.C. study entitled, Arrested Development: the impact of affordability on millennial living, found the majority of those at home are employed and not going to school. Furthermore, a quarter of B.C. Millennials who live at home say they make between $3,000 and $5,000 a month. And one third say they are saving more than half of their earnings.
The report shows, contrary to stereotypes, Millennials across Canada are not squandering their earnings by living large, and in fact are spending less on personal indulgences than people their own age did almost 25 years ago.
The report projects that in 2016, Millennials under 25 will spend three per cent of their total household income on tobacco and alcohol, and five per cent on recreation. By contrast, in 1992, Generation Xers of the same age spent six per cent on tobacco and alcohol, and eight per cent on recreation.
The report also found:
• More young adults are at home: 42 per cent of people aged 20 to 29 lived with their parents in 2011 (the latest count from Statistics Canada) compared to 27 per cent in 1981.
• The trend is also higher in Vancouver: 47 per cent of people aged 25-29 lived at home in Vancouver in 2011, compared with about 42 per cent for the same age group living elsewhere in Canada.
• Canadian Millennials spend more on shelter than any other cost (between about 24 and 30 per cent of their household income).
• By percentage, Canadian Millennials spend more on shelter than any other age category with the exception of people over the age of 75.
• The second largest cost for Canadian Millennials is transportation (between about 16 and 22 per cent of their household income).
• Of the B.C. Millennials surveyed who were living with their parents, only 18 per cent said they are doing so because they are unemployed or looking for work.
• More than a quarter of B.C. Millennials who live at home (27%) say they have put off relationships or marriage because of their situation.
While many B.C. Millennials say they are saving responsibly, their parents are less likely to feel that is true—only 33 per cent of parents with a Millennial still at home feel their child is saving to buy a home.
Parents are also less optimistic about when their children will be ready to move out. While only one third of Millennials (32 per cent) believe it will take them more than three years to move out, the majority of parents (59 per cent) believe it will take more than three years.
The report makes recommendations to improve affordability for Millennials, such as encouraging employers to pay a living wage, and encouraging government to incentivize the creation of affordable, purpose-built family housing.
“Increased financial burdens for Millennials make it harder to break out on their own, buy a home or start a family even when employed. We need to stop perpetuating unhelpful stereotypes about them and find solutions to make housing in particular more affordable.”
– William Azaroff, Vancity’s vice-president of community investment
Vancity is a values-based financial co-operative serving the needs of its more than 519,000 member-owners and their communities in the Coast Salish and Kwakwaka’wakw territories, with 59 branches in Metro Vancouver, the Fraser Valley, Victoria, Squamish and Alert Bay. As Canada’s largest community credit union, Vancity uses its $19.8 billion in assets to help improve the financial well-being of its members while at the same time helping to develop healthy communities that are socially, economically and environmentally sustainable.
About Insights West:
Insights West is a progressive, Western-based, full-service marketing research company. It exists to serve the market with insights-driven research solutions and interpretive analysis through leading-edge tools, normative databases, and senior-level expertise across a broad range of public and private sector organizations. Insights West is based in Vancouver and Calgary.
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Susan Mohammad | Vancity