More and more millennials shying away from ownership

by Ephraim Vecina04 May 2016
To the uninitiated observer looking at purchasing trends in Canada’s dynamic real estate sector for the first time, millennials seem to be shying away from ownership—and the results of a recent study bear out this assumption.
 
In a commissioned survey of over 2,000 respondents, the Bank of Montreal (BMO) found that around 70 per cent of respondents in the 19-35 age range would be willing to delay the purchase of their first homes, even when 60 per cent of them noted that renting does not fulfill their needs.
 
Only 26 per cent of this cohort is expecting to buy homes by 2017, and approximately 44 per cent said that they aren’t comfortable in purchasing properties right now. Furthermore, 38 per cent of the respondents feared losing their disposable incomes, while 42 per cent said that they would rather use the funds for establishing start-ups or taking further education.
 
Meanwhile, 66 per cent are projecting a drop in value in the near-future, and 78 per cent stated that they might find their purchases defective after sale.
 
These results point at a key characteristic of the millennial would-be buyer: Housing is more of an investment than a milestone.
 
“The return on a home purchase is important to millennials and they take a thoughtful approach to how their home will fare in the current housing market,” BMO director of home financing Damon Knights stated in a press release, as quoted by The Huffington Post Canada.
 

COMMENTS

  • by Alister 5/4/2016 11:01:44 AM

    I don't believe the report accurately depicts the plight or reality of many millennials. What we are really seeing is the result of the growing trend towards part time employment or contract work employment, neither of which satisfies the banks lending criteria, and this in turn prevents these potential buyers from entering the market, delaying their ability to purchase until they are able to find full time employment !

  • by Shawna 5/5/2016 11:51:11 AM

    I agree with Alister. I believe millennials want to purchase but have to delay for the reasons already stated.

  • by Angela Viau-Hendry 5/6/2016 10:26:56 AM

    Part of the fear associated with the low return on investment is so many people don't live in their homes long enough to build any equity. I tell my clients repeatedly to commit to a minimum of 3-5 years. At 3 they will break even in most cases. Home ownership is an investment but not a quick money maker in most economies. Some people do get lucky like I'm sure the Toronto and Vancouver markets are experiencing but taking a long term approach is prudent. Condos can provide affordable solutions but too many developers have constructed poorly leaving many buyers with huge special assessments. This creates fear of potential problems with home ownership. Overall owning a home is one of the best decisions millennials can make. Rents will continue to rise over the long term and how many other non-taxed investments are there?
    The government needs to start implementing stronger policies for builders to ensure construction is sound and millennials need to realize the sacrifice of not having everything they want when they want it. this generation is also prolonging raising a family so we may see a shift later than past generations as it is certainly a challenge to raise a family in small downtown condo and go out to eat and travel with babies in tow.

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