A new cross-Canada survey suggests that people aged 25 to 30, which makes up the so-called millennials’ demographic, have a strong desire for home ownership but believe a number of factors, including limited inventory and high home values, are pricing them out of their dream.
According to Royal LePage’s Chief Executive Phil Soper, the survey, conducted by Leger, found that 87 per cent of Canadians aged 25 to 30 believe home ownership is a good investment, however, only 57 per cent of those believe they will actually be able to afford a home in the next five years.
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“Millennials are clever spenders, they’re not interested in a garage full of tools like baby-boomers, and will use services rather than owning things, except when it comes to properties,” Soper told AM 640’s morning show. “They very much think along the lines of their parents. However, they are not optimistic right now because homes are so expensive.”
The survey found that 69 per cent hope to own a home in the next five years, but recognize that they face challenges that their baby-boomer parents never encountered, like finding lucrative employment, searching through limited inventory and high home values.
Location is a big variable, according to the study which identifies differences in millennial thinking from region to region since each segment encounters different issues.
“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,” says Soper, “Where prices are more affordable, job markets can be more uncertain.”
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High home values are holding back much of the peak millennial population in Ontario with only 52 per cent of respondents believing they will be able to own a home in the next five years despite 72 per cent of respondents wanting to own. Another three-quarters say homes in their region are simply not affordable.
With over 50 per cent of millennials willing to spend up to $350,000, according to the study, recent market numbers show that purchasers will receive significantly less square footage if buying in the Greater Toronto Area (GTA) or Vancouver compared to anywhere else in the country.
On average in the GTA, a millennial buyer will get a 910 sq. ft. condominium with 2 bedrooms and 1 bathroom, while a shopper in Vancouver will see an 879 sq. ft. condominium with 2 bedrooms and 1 bath.
The survey polled 1,000 peak millennials (age 25-30), between June 7 and June 14, 2017, using Leger’s online panel, LegerWeb. A probability sample of the same size would yield a margin of error of +/-3.0%, 19 times out of 20.
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