How millennials impact the real estate market?
1. More millennials likely to move to the suburbs
Although the vast majority of millennials in Canada and the US look for metropolitan areas, more and more millennials are considering buying in the suburbs or moving into a house in a rural area. In Ontario, millennials are more likely than boomers to look for a place to live in urban areas and more likely than them to look for a place to live in suburban areas. In contrast, 58% of Ontario’s boomers look for a house in rural areas or small towns. Indeed, 31% of millennials prefer downtown, 35% want to live in the suburbs, 23% would like to live in a small-town and 11% would want to live in rural areas. In Quebec, we notice this tendency as well, but it is more present than in Ontario only. Indeed, Quebec millennials would prefer living downtown or near it but 53% of them would opt for the suburbs due to the cost of living downtown.
2. The millennial debt’s impact
Overall, 65% of Canadians between the ages of 25 and 30 are not able to afford a home. This number is not a surprise, as we covered in a past article, millennials are generation that is highly indebted. Millennials in Montreal have it easier than in Vancouver and Toronto because it’s more affordable than those 2 cities, but it is still hard to save for a down payment in all 3 cities. 83% of Montreal’s millennials aspire to buy a home one day, and 50% plan on doing so in the next 10 years, but how could they afford it? According to a survey, half of millennials all over Canada was able to do so with the help of their family. Therefore, they are able to make the down payment with financial help for their close ones.
3. Millennials are leaning towards becoming the main demographic of home purchasers
Millennials are at the moment the second largest group of home buyers, after gen xers. Their presence is predicted to grow exponentially. In fact, the number of people aged 25 to 30 is projected to rise of 17% in 2021 in comparison to 2016. According to Jean Michel Laferté, real estate broker at ReMax, millennials have understood what their parents did not, that real estate is a secure investment and that one should save up their money until they are able to buy a property. As a generation, millennials leave their parents home much later than previous generations, allowing them to save up and buy a property.