Are Millennials Changing The Housing Market?

Millennials represent a young age category, 15-34 years, and many are starting to plan for families while trying to determine when and where to live. The trend during the real estate boom showed that this generation was more likely to rent small apartments or lofts and live in much smaller spaces than the generation before them. They were willing to sacrifice physical space to stay in close-knit communities and larger cities, often having children while living in a one- or two-bedroom condo.

A recent survey released in May 2018 by Genworth Canada showed that almost 6 in 10 Canadian millennials are already homeowners, with more of this age group planning to buy a home in the next two years. While nearly half of new home buyers are now part of this age group, the trend continues to be investment in smaller spaces closer to the city. They are foregoing large homes in the suburbs in favour of condos and townhomes. When you consider that a home worth $260,000 in the Greater Toronto Area 25 years ago is now worth well over a million dollars, despite the recent slowdown, it’s not surprising that millennials are forced to look at other options.

The millennial generation is the first generation who are unlikely to be able to afford a home in the town they grew up in and are making concessions accordingly. With the GTA and Vancouver still offering the most promising job opportunities, this category of employee is not willing to make the daily commutes from the suburbs their parents did. A large number of millennials are seeking a minimalist lifestyle which includes fewer possessions and smaller living spaces, as well as paying attention to their carbon footprint by choosing homes with energy-efficient appliances and fittings. “For them, a home has more to do with being part of a complete community than it did in their parents’ generation,” says Toronto developer Mazyar Mortazavi, owner of Tas DesignBuild, who is now focusing on building mid-rise condo projects outside of the core Toronto area.

Millenials are also more likely to be receiving assistance with their down payment from parents or relatives, but are also making investments wisely. According to the financial industry, millennials are a generation that is more financially savvy, spending more time looking at various housing scenarios and visualizing whether they can afford the rising costs of living once they start a family. Experts recommend that not just millennials, but all prospective homebuyers plan out where they may be in a few years and whether or not they’ll still be able to afford the scenario they choose.

by Julie Achtermeier