A recent study sponsored by the Ontario Real Estate Association (OREA) highlights that student loan debt is a significant hurdle for recent graduates aspiring to own a home, often leading them to move back in with their parents.

Study Findings and Graduate Dilemmas

The study surveyed 1,500 Ontario post-secondary graduates aged 20 to 44, revealing that 42 percent of graduates are considering leaving the province to find more affordable housing. On average, each graduate had around $14,500 left in student loan debt, with nearly 70 percent acknowledging that student loan debt makes it harder for them to afford a house in the future.

Graduates often find homeownership out of reach, especially as they struggle to secure rental apartments after graduating. Many expressed their concerns about homeownership seeming like an unattainable dream.

Impact on Housing Market and Family Dynamics

The study also shed light on graduates’ inclination to return to their family homes instead of renting or purchasing new ones. This trend is concerning for the OREA, as it impacts the housing market. Older generations are unable to downsize, exacerbating housing market stagnation and limiting younger generations’ access to it.

Concerns and Proposed Solutions

Tim Hudak, CEO of the OREA, emphasized that the decreasing rates of homeownership stem from a lack of affordable housing infrastructure. He fears that this difficulty in purchasing a home could lead to a brain drain, with educated graduates leaving Ontario in search of affordable housing elsewhere.

To address the housing affordability crisis for graduates, the OREA submitted recommendations to Queen’s Park, including increasing the repayment grace period for student loans and allowing students to turn their debt into home equity through a First Home Savings Account (FHSA).

The OREA’s proposed FHSA allows contributions from those with student debt, resulting in a matched amount of debt forgiven, providing a potential pathway to turn debt into equity for future homeownership.

While some graduates prioritize rental quality and affordability, the OREA stresses the long-term benefits of homeownership, emphasizing its role as a proven return on investment and a place to create lasting memories. Hudak urged graduates not to give up, as they anticipate better housing solutions in the future.