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While it’s no secret that real estate remains out of affordable reach for many young Canadian adults, the majority still aspire to own a detached home one day – even if it’s just a pipe dream.
Only 36 per cent of “peak” millennials – those aged 25 – 30 – feel owning a house will ever be a reality, according to a Royal LePage study that surveyed 1,000 aspiring buyers. It found that only a third of this age group own their homes, as 50 per cent remain in the rental market, and 14 per cent live with their parents.
That’s having a profound impact on traditional homeownership trends, says Royal LePage President and CEO Phil Soper, as the huge size of this demographic – which will grow by 17 per cent in 2021, compared to 2016 – puts pressure on the supply of affordable housing.
“The pent-up demand for housing is enormous, with only a third of this large demographic currently owning a property and an overwhelming majority desiring to become homeowners,” he says.
“Whether they choose to buy or rent, peak millennials will inevitably shape the housing market due to their sheer volume. 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.”
Peak millennials face challenges their “baby boomer parents never encountered”, including stiffer mortgage qualification rules, limited home supply, and high prices in the best job markets. That’s prompted 52 per cent of them to consider moving to the suburbs to improve their affordability, especially when it comes time to raise a family (59 per cent). A full 69 per cent say they can’t afford a home in their region at all, while 24 per cent say they can’t qualify for a mortgage.
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