SASKATOON—Young renters still dream of owning their own homes, but many have been struggling to save for a down payment as housing prices have risen. In 2023, according to the Canadian Retail Association, the average house price in the city will be about $374,217, with July having the highest amount at $379,500 and January having the lowest at $364,900.
As of November 2024, the price had increased by 6.4 per cent to an average of $398,800. Financial institutions, like Conexus Credit Union, require a down payment of at least five per cent. So, you would need $19,940 for a down payment on a $398,800 house.
The five per cent down payment is for houses up to $500,000. However, a home buyer is encouraged to aim for a 20 per cent down payment—$79,780 on the current value of $398,800—as it lowers the mortgage that would save you thousands of dollars in interest charges.
With the rising home prices for those renting, particularly Generation Z and older Baby Boomers who desire to buy their own houses, it is increasingly becoming a dream—a distant and elusive reality. Many young renters in the city have bills to pay, buy groceries and other miscellaneous expenses aside from the monthly rent. That leaves them struggling to save for a down payment.
According to Point2Homes, based on data collected by Statistics Canada, in Saskatoon, where the minimum wage is $15 per hour, Gen Zers must save close to 10 years for a down payment of about $40,000. Older millennials and Gen X could do so in about three years.
This reveals that despite having some of the lowest down payment requirements in Canada’s largest cities, renters in a prairie city like Saskatoon are grappling with much longer saving periods than anticipated.
According to a recent study, 62 per cent of renters across Canada, particularly among Gen Z and older Baby Boomers, express a strong desire to purchase a home within the following year. For young renters in Saskatoon, the dream of owning a home seems achievable at first glance. However, the numbers tell a different story.
While a down payment of approximately $41,000 might seem manageable compared to larger cities, the stark reality is that Gen Z renters in Saskatoon would need nearly 10 years to save that amount—assuming they could put aside a significant portion of their monthly income.
Aside from financial barriers, renting in Saskatoon is another challenge for younger people, especially those just starting their careers or families. Rental prices have steadily climbed, and many are stuck in a cycle of paying high rents and watching their hopes of homeownership grow fainter each year.
Based on recent data, the monthly rent for a studio apartment is about $1,100 and $1,200 for a one-bedroom unit. A family of four needs around $2,500, and a three-bedroom apartment costs about $1,700. For a young couple, the starting price for a two-bedroom apartment is around $1,400.
Additional data provided by Point2Homes showed that in the prairies, about 30 per cent of solo renters are seniors over 65 in the Saskatchewan cities of Regina and Saskatoon. This number is over 50 per cent in Winnipeg, Manitoba, and Edmonton, Alberta, which shows the impact of rising home prices.
A nationwide poll by Point2Homes showed that almost half of respondents expect the down payment to be less than $25,000. However, in Canada’s 20 largest cities, even starter homes require a down payment of up to $135,520.
The national average for a starter home is almost $350,000, putting the 20 per cent down payment at $70,000 or $17,500 at five percent. Point2Homes conducted a nationwide survey that showed nine out of 10 renters have less money in their savings despite wishing to buy a home.
Young renters are motivated to become homeowners, whether moving out of the family home to be more independent or starting their own families and needing a right-sized, stable home.
Of course, incomes change with age and experience, and lower down payments are also an option. However, home prices are always going up, which means that, for many renters, buying a home feels like chasing a moving target.
