Homeownership is becoming a distant dream for many Canadian millennials, according to a study from KPMG.
Around two in three are worried that if they buy a house and delay their savings, they will not have enough saved for their retirement. In fact, only 54% of millennials expect they will be able to afford a home in the future.
These findings highlight how different millennials' financial circumstances are from those of the previous generations, said Martin Joyce, partner and national leader for human and social services at KPMG.
"They face unique challenges when it comes to building wealth despite having more education and income, primarily because of housing unaffordability," he said.
Roughly 42% of millennials are putting their retirement savings on hold to focus on paying off their mortgages. Joyce said this could indicate that the millennial population is facing a choice today that their parents' generation did not.
"They either buy a home or focus on saving for retirement. Buying a home involves taking on considerable debt because house prices are so high in relation to incomes, and that limits millennials' ability to save," he said.
Furthermore, millennials are highly indebted, making saving for a house even harder. Figures from Statistics Canada show that their debt-to-income ratio of 216% is considerably higher than what Gen-Xers and baby boomers had at their age.
The higher costs of living, particularly rents, are also squeezing the younger generation's ability to save for retirement.
"We're concerned that millennials will not be in the same position to retire as the generations that preceded them were. A variety of factors is hampering their ability to accumulate more wealth and prompting calls for government reform," Joyce said.