The vast majority of Canadian millennials — 84 per cent — feel that owning a home is an important life milestone, according to Zoocasa, the real estate brokerage and online resource that recently released its 2018 Housing Report.
Millennials, however, are having a hard time reaching that goal, with high monthly rents in city centres like Toronto reducing their ability to save for a down payment.
“Homeownership remains a coveted goal for many Canadians. However, achieving this perceived life milestone remains as challenging as ever in 2018, as a crop of new policy measures, heating home prices, and a rising interest rate environment continues to present obstacles to homeownership,” says Zoocasa.
Millennials are more likely to to be renting their current home compared to older age groups, with 39 per cent renting compared with 26 per cent of gen-xers and 12 per cent of boomers. The biggest reason cited for renting was that they were saving for a down payment (33 per cent). Only a small fraction — 8 per cent — said they were renting because they prefer not to own.
Houses in Mississauga, as an example of a previously affordable place for first-time buyers, reached an average selling price of $721,160 while even Mississauga condos are selling for $435,254.
As it is, however, all these property prices remain out of reach for most millennial renters, who only have $4,999 or less saved for a downpayment.
Yet, millennials still aspire to own property. That’s partly because Canadian real estate is still seen as a solid and stable investment.
Even with the 2017 drop in home prices, for example, the average Canadian home outperformed the broad Canadian stock market. While S&P/TSXComposite Index flatlined in 2017, Toronto home prices grew 7 per cent from its benchmark. So it’s no wonder that over 60 per cent of respondents believe real estate is a better investment than buying shares.
Overall, the Housing Trend Report makes clear that millennials have the same housing goals as previous generations: they want to own.
The findings are based on a survey conducted in March 2018 of 1,431 respondents who live in Canada. The estimated margin of error is +/- 2.6 percentage points, 19 times out of 20.
Zoocasa.com is a real estate company that combines online search tools and a full-service brokerage to empower Canadians to buy or sell their homes faster, easier and more successfully. Home buyers can browse real estate listings on the website or the free iOS app.