“Facing challenges their baby-boomer parents never encountered, peak millennials are confronted with significant obstacles that vary depending on where they live,” Phil Soper, president and CEO, Royal LePage, said. “While finding employment in our largest urban markets, Toronto and Vancouver, is relatively easy compared to other areas of Canada, buyers face limited inventory and high home values in these regions. Where prices are more affordable, job markets can be more uncertain.
“The pent up demand for housing from millennials is enormous, with only a third of this large demographic currently owning a property and an overwhelming majority desiring to be homeowners.”
According to a new report from Royal LePage, the number of Canadians aged 25-30 is projected to increase 17% in 2021 compared to 2016. And that cohort will have massive purchasing power.
“Whether they choose to buy or rent, peak millennials will inevitably shape the housing market due to their sheer volume,” Soper said. “We expect demand from this demographic to put additional pressure on entry-level housing and investment properties being used to supplement the limited inventory of purpose-built rental buildings.”
The desire to own a home is strong among these Canadians, with Royal LePage’s cross-Canada survey finding 87% of Canadians aged 25-30 believe home ownerships is a good investment.
However, slightly fewer –69% -- hope to own a home in the next five years and only 57% of those surveyed believe they will be able to afford one.
Despite the challenges facing millennials who plan to enter the housing market, Soper suggests there are some developmental strategies that could help meet demand.
“While peak millennials are becoming increasingly inventive in their quest for homeownership, careful attention to urban planning could help to alleviate some of their constraints,” said Soper. “By focusing on vertical living, and developing larger, affordable condominiums in urban markets, supply limitations would ease, providing long-term, appealing solutions to young buyers in search of affordable property.”
Gen-Y is a massive cohort that is overwhelming interested in breaking into the real estate market – but will affordably challenges and impactful mortgage rules allow them to?