Like their baby boomer parents, today’s millennial generation is about to make their impact on the housing market as they start having children, and their natural need for more space increases.
But how will Canada’s millions of millennials end up in their quest to make a stable living in order to consistently afford their home. Just how they will make and impact on the real estate market has just started to play out.
This first wave of millenials, baby boomers’ children who ages range from 15 to 34 and make up 25% of Canada’s population, are entering their prime home-buying years. Many live in Vancouver & Toronto; where job growth has been increasing.
Among those fortunate or lucky enough to find a decent, dependable full-time non-contract job; have been driving-up competition for single-family homes & condos.
Affordability will play a huge factor in who buys what, but Canada Mortgage & Housing Corporation has surprisingly published little data so far on how much impact millennials have been having so far. Also the Toronto Real Estate Board, which covers the GTA resale market every two weeks, also has published very little if at all on the regarding the influx of millennials into the real estate market.
Despite the little data published so far Millennials have so far a significant influence on the GTA home rentals, because of their eagerness to often pay a higher price; $1700-$1800/month – many wishing to rent cloud-level new glass and granite units, to enable them to have an easy walk to and from work.
This has helped power the recent ongoing downtown condominium boom in Toronto, especially in the downtown core where, despite hundreds of of new units coming into the market per month; the rental vacancy rate remains below 2%.
Toronto condos are now incrementally rising to the half million mark, so condo developers have started to building rental-only units, anticipating a high percentage of millennials will long-term renters.
With about a million and a half millennials in the Tornoto area, they are a key group lto keep pushing upward pressure on the housing market.
Millennials and those before them, the 30-somethings now going on 40-somethings, are a generation of men and women who are spending their early adult lives in centers of large cities. Home is about being part of an integrated community more than it did in previous generations; in contrast to back in the days when having a front yard, a backyard, and a 2-car garage.
However, the average new condo has compressed space in the last decade, from an average 909 to 766sqft. Developers state this is what is needed to keep costs down during this period of escalating land values and ever increasing government taxes & faces.
For the more old-fashioned segment of millenials, a detached house in the city now averages more than $1,000,000 has set the stage for townhouses and semi-detached homes to be the way to go in the Vancouver & Toronto areas for young buyers, especially new parents, wanting to bypass the high-rise condos.
The notion of home ownership seems to be changing, in which young buyers are looking less for quantity and more for quality. They are also looking for “complete communities” – urban villages with parks + social amenities.
Toronto communities like Brooklin, Ajax, Pickering, Oshawa, & Whitby and have become millennials magnets as GO Transit ride frequencies have increased and the eastern extension of Highway 407 is also nearly completed.
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