Generation Y and Real Estate
Generation Y and Real Estate-A Dream or a Possibility?
I have been serving residential real estate in Mississauga since 2003. While I am a full-time real estate professional, I am a real estate consumer as well, and my own real estate ventures follow the same path as many other first generation families who move to Canada from different parts of the world. My daughter and son were born in 1993 and 1994 respectively, and represent the typical millennial or Generation Y – those born between early 1980s and early 2000s.
I wanted to share this aspect of my personal life with you as I feel it will resonate with many of you who are in the same life stage as myself, with university going children. We as parents would love to help springboard them into independent living and real estate investing, if we have the resources to do so.
I am sure you know of some members of Generation Y who feel intimidated by the current surge in home prices and wonder how they’ll ever afford a house of their own? The harsh reality is that this generation may have been squeezed out of the real estate market for detached homes a few years ago. Basically, we will continue to have members of the younger generation saying, sorry, we simply can’t afford a detached freehold home.
Generation Y and Real Estate – What Does the Future Look Like
“Condominiums will become a more common and desirable way to achieve the dream of property ownership,” Vancity (Vancouver City Savings Credit Union) said in its recent report titled: Downsizing the Canadian dream – Home ownership realities for millennials and beyond. What’s true for Vancouver, is also true for Toronto or Mississauga.
Generation Y and Real Estate – Implications on Mississauga Condo Market
The rate Mississauga residential real estate is going; freehold homes will soon be out of reach for new buyers, let alone Gen Y. In fact, we are already seeing big spikes in prices. Earlier last month, I talked about how unaffordability will drive Mississauga condos. Condos will be the way to go, be it Mississauga or Toronto, younger or older first time buyers. Baby boomers are encouraging kids to stay home and save on University residence costs and to use this money to buy real estate instead. This trend is very popular when good universities are close to home, and parents have some money available to invest in real estate. Youngsters consider themselves fortunate to be able to live rent-free with their parents. In fact, the number of people between the ages of 20 to 29 living with their parents hit 42.3% in 2011 census, up from 27% in 1981.
Generation Y and Real Estate – A Means to Ownership
Often times, parents have saved up enough money in RESP to cover off their kids’ education, or children may take OSAAP or other loans to fund their education. If education expenses are taken care of, and if children are staying at home instead of having to pay rent, parents could consider putting that saving as a down payment for a condo, giving their children a head start in life. Once the property is rented, it pays for itself, till such time as the children actually decide to live in it.
This process allows young adults to learn how to manage their own properties, understand how money moves in and out, deal with tenant/ landlord issues, and when they are ready to live on their own with good jobs to pay the mortgage, they are in a way, set for life.
It is with fond memory that I remember playing Monopoly with my kids, where buying selling real estate was just a game, and now that they have finished their undergrad programs, they are already managing their own condos in real life! And I am seeing the same trend with some of my clients. I recently bought condos in Mississauga for two of my clients, both investment properties for their children, who saved on residency costs by staying at home. It makes me very happy
to see that some of my newest clients are also the youngest!