Are you born between 1981 and 1996? If the answer is yes, you’re a millennial and you just might be looking to purchase a home within the next few years.
Millenial Homebuyers are those aged 27-42. They’re the fastest growing generation in Canada and make up the largest share of our country’s working class.
Between 2016 and 2021, the Millennial population in Canada increased by 8% thanks to higher immigration rates among their age group and that trend is expected to continue for several years to come.
By 2029, they are projected to overtake the Baby Boomer generation and become the largest share of the Canadian population.
According to a survey of Canadian Millennials that was conducted by Leger and commissioned by Royal LePage, 4 million Millennials plan to purchase a home within the next 5 years. Home ownership amongst this age group is certainly a top priority – in fact, 68% of Canadian millennials who don’t currently own a home believe that it is of the utmost importance.
Royal LePage President Phil Soper said that Canadians value homeownership and see it as a “right of passage.”
While it’s clear that owning a home is a goal that many are looking to achieve, many buyers continue to face challenges. 60% of millennials who don’t currently own a home believe that they will one day – but of those 60%, half of of them say they would have to re-locate in order to achieve their goal.
This is something that we have seen a lot in Ottawa the past few years, with many people coming from the GTA, Montreal, Vancouver, among other places in Canada as we are still more affordable price wise in Ottawa than these areas.
40 % of millennials have also said they would even change employers to be able to work fully remotely.
Lack of housing supply and affordability challenges continue to play a big factor for many entry-level homebuyers and this is what has prompted many potential buyers to consider re-location outside of their home cities.
Coming up with the funds for a down payment and earning enough annually to be approved for a mortgage is another huge problem. Many first time buyers are currently experiencing the effect of high interest rates in Canada as they look to get pre-approved. The situation is so dire that one quarter of Canadian Millennials believe they will never be able to purchase a home. That number is highest in Toronto where 28% say home ownership is out of reach.
For some Millennials, help from Mom & Dad could be on the way. 25% of those in the Baby Boomer age group say they have or would assist a child financially in being able to purchase a home.
According to Strategic Insights, between 2016 and 2026, its estimated that wealth transfer from inheritances in Canada could be upwards of a trillion dollars. With more than 50% of Canadians aged 50-75 receiving an average inheritance of $180,000, at least some of these funds could trickle down to Baby Boomers millennial children.
The bottom line is this: Canada’s Millennial population is interested and committed to the prospect of owning a home but The path to getting there won’t be the same for everyone.
I’ve spoken continuously about our supply shortage and how it is impacting our housing market. I’ve written before that Canada is estimated to be short about 1.8 Million homes.
Strong millennial demand and rising immigration will continue to put the most pressure on our market as supply remains low. If you’ve given any through to buying your first home, I understand that it can be overwhelming and if you’re thinking about making a purchase in the Ottawa area, I’m here to help. For more information about buying or selling, please visit our website.