First-time homebuyers suffering massive job losses
Canadians in the typical first-time homebuyer age range were hit with full-time job losses that neared 200,000 in March when compared to employment levels just a month prior.
Real estate consultancy Altus Group used recent figures from Statistics Canada’s Labour Force Survey and its own internal data to assess the impact that the COVID-19 pandemic may have on future homebuying activity in Canada.
First, Altus Group mined its own recent data on first-time homebuyer demographics across the country. It found that Canadians between the ages of 25 and 44 made up 84 percent of first-time homebuyers over the last two years according to Altus Group data. The narrower 25 to 34-year-old segment made up the majority, with 64 percent of first-time homebuyers falling into this age range.
The firm then reviewed Statistics Canada’s preliminary data on job losses that came as a result of COVID-19’s spread across the country. It observed that 108,000 full-time jobs were lost in the 25 to 34-year-old range while 77,000 were lost in the 35 to 44-year-old range. Of course, losses were felt across all age ranges, with under-24s seeing the largest percentage decline when compared to the previous month and the 45 to 54-year-old age group rivalling the total job losses seen in the 25 to 34-year-old range.
That being said, potential first-time homebuyers are likely to be more adversely affected by job loss when it comes to their future ability to purchase a home. Older groups typically have more savings and a previously purchased property to leverage, while younger groups have yet to enter their prime homebuying years. Potential first-time buyers in the 25 to 44-year-old range — especially those at the younger end of the spectrum — are counting on this time to save for a downpayment and enter the market.
“These job loss patterns could have implications not just for absolute housing demand levels going forward, but also the relative mix of demand between the various segments (for example, first-time buyer, move-up buyer, move-down/lifestyle and “younger” senior segments),” wrote Altus Group in a post titled ‘Massive job losses among key potential first-time homebuyer age groups’ that was published recently on its website.