Nearly three-quarters of Canadians aged 18 to 25 said they own at least one investment, compared to 56 per cent in the U.S., according to a 2023 study by the CFA Institute.Richard Drew/The Associated Press
For many younger Canadians, the door to homeownership slammed shut early in the COVID-19 pandemic. Many of them soon found refuge in an unlikely place – the stock market.
While a furious run-up in prices threw up barriers to buying a home for a generation of Canadians, financial markets flung their doors wide open.
Trading apps have made investing in the stock market as easy as ordering takeout – and often cheaper, now that trading commissions are going to zero.
Digitizing the investing process has lured hordes of younger investors into financial markets.
Today, the share of trading accounts at online brokerages held by individuals under the age of 35 is 28 per cent, which has nearly doubled since 2018, according to data provided by Investor Economics.
The same cohort appears to be backing away from the housing market. The youngest Canadian families were the only demographic to have steadily reduced their mortgage debt since the end of 2022, according to Statistics Canada.
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These parallel trends have rerouted the traditional path to building wealth in Canada. Baby boomers typically bought homes early on and came around to building an investment portfolio in their 40s and 50s.
Gen Z and millennials are flipping the script, getting into the stock market before their homeownership years. Here, we have yet another side effect of the housing boom in Canada, with vast implications for household finances to unfold in the years ahead.
From one perspective, being rebuffed by the housing market could prove to be a blessing in disguise for those pushed into the arms of a red-hot stock market.
Since the peak in equities before the pandemic, the S&P/TSX Composite Index has gained more than 100 per cent after dividends, which equates to a 13.4-per-cent annual return. Bitcoin, which is highly popular among younger investors, has risen nearly tenfold over that same time.
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Investing early is crucial to harnessing the power of the stock market to compound wealth over time. It’s entirely possible that some housing market orphans will find themselves better off financially by renting and investing intelligently, rather than pouring all their savings into the housing market.
It’s unclear, however, how many newbie investors have given up on a home versus how many are using the stock market to build up a down payment quicker. Most likely, it’s both. Qtrade Direct Investing said assets held by its clients in first home savings accounts are on track to double this year.
Either way, younger Canadians have clearly caught the investing bug. Nearly three-quarters of Canadians aged 18 to 25 said they own at least one investment, compared to 56 per cent in the U.S., according to a 2023 study by the CFA Institute.
“They’re very comfortable with stocks and ETFs, and even some of them are getting into option trading,” said Stacey Petersen, head of Qtrade. “They’re taking the time to educate themselves.”
Not all young investors have been forsaken by the housing market, however. Many people from younger generations have different priorities than generations prior when it comes to key milestones. They stay in school longer, as well as marry and have children later.
We shouldn’t assume all young investors are embittered would-be homeowners forced into the stock market against their will, said Kendra Thompson, financial services consultant and founder of Epok Advice in Toronto.
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“The industry isn’t responsible for defining the hopes and dreams of Canadians,” she said. “What’s important is that more Canadian[s] have access to the upside of the public markets.”
But for many, owning a home is not as achievable as it once was. Fifty years ago, the average Canadian home sold for around 3.5 times the median household income. Today that ratio is closer to eight times.
And that’s after the greatest improvement to Canadian home affordability since the 1990s. Prices at the national level have been flat or declining for close to four years now. Borrowing costs have also steadily dropped since the Bank of Canada started cutting rates early last year.
But the average home remains historically unaffordable, especially in the country’s largest cities. In Toronto, the average mortgage payment eats up two-thirds of median household income, according to 2025 data from RBC Economics. In Vancouver, it’s near 90 per cent.
In certain markets, homeownership remains unattainable for lots of younger Canadians. That’s why the average first-time homebuyer is quickly getting older.
In 2021, 67 per cent of first-time homebuyers were under the age of 35, Royal LePage data show. In 2023, that number dropped to 57 per cent. That’s a huge change in just two years, driven by the wild ascent of home prices over that time.
In Ontario, the typical first-time homebuyer is now 40 years old.
Of course, the stock market does not hold the answer to Canada’s housing shortage. Traditionally, not getting on the property ladder in Canada has had major consequences for financial security.
It’s a problem that lots of younger Canadians are trying to invest their way out of. Others may never catch up.