Millennials and Real Estate
Millennials and Real Estate – RE/MAX Survey Results
Nearly 80% of millennials agree owning a home is attainable according to new RE/MAX poll
Many millennials expect help with downpayment from parents.
Canadian millennials are optimistic about the future, including their homeownership prospects, according to a new poll by RE/MAX. The survey, conducted by Leger, found that 78.5 per cent of Canadians 18-34 agree that owning a home they love is attainable. In all provinces, Canadians overwhelmingly agree that homeownership is attainable, despite price appreciation in cities like Toronto and Vancouver.
The survey also found that 81.6 per cent of Canadians 18-34 agree that finding a good job in their field is attainable, demonstrating overall optimism about their future.
While millennials are optimistic about homeownership, many expect help in order to make their dreams a reality. Of Canadians 18-34 who are considering buying a home, 37 per cent expect help with their downpayment from a family member or friend. Of those who are expecting help, 60 per cent anticipate that it will come from their parents.
“The older generation has seen significant appreciation in the value of their homes, while the younger generation is entering the market at a higher price point,” said Gurinder Sandhu, Executive Vice President, RE/MAX INTEGRA Ontario-Atlantic Canada Region. “This means first-time buyers in Canada’s higher-priced markets often need a little help, which many parents are in a position to offer.”
Unsurprisingly given the higher home prices in these regions, prospective buyers in all age demographics in British Columbia are most likely to expect help, followed by those in Ontario.
The survey also found that when asked about their financial priorities, 68.2 per cent of Canadians 18-34 agree that saving for a downpayment is a priority and 78.4 per cent agree that saving for retirement is a priority.
“We’ve found that for many young Canadians, homeownership is an important milestone that they are actively working toward,” said Elton Ash, Regional Executive Vice President, RE/MAX of Western Canada. “Furthermore, while Canadians continue to value and aspire to homeownership, they are not doing so at the expense of other financial considerations, such as retirement savings.”
Source: RE/MAX Press Release April 7, 2015, Toronto and Kelowna.
The survey, conducted by Leger, surveyed 1,516 Canadians between Monday, March 28, and Thursday, March, 31, 2016.
Millennials and Real Estate – Savvy, confident and prudent approach
The harsh reality is that college or university graduates may struggle for a while to repay their student loans with entry-level salaries, and so home ownership would become a distant dream for them. They simply cannot afford paying off student debt as well as mortgage at the same time. Unless their parents step in to help. I have myself witnessed this with my investor clients where parents are willing to help their adult children with some down payment, or monthly payments.
At the same time, young professionals who have been working for 2-3 years, may already have some money saved up to cover down payment for a condo in Square One, or a condo in the GTA. In order to make monthly mortgage payments more achievable, the concept of co-ownership is also fast becoming popular with Gen Y real estate investors. Here two working friends or siblings buy a property and jointly share the costs to carrying a mortgage and home ownership.
And then there are also young couples who prefer to own a home over a condo, based on affordability. We recently bought a Gen Y Couple an affordable townhouse in Milton. End of the day it is not just a lifestyle choice, but realization on part of the millennials that if they can, now is the time to invest in real estate. Rents are going up and price to purchase a condo or a townhouse is also on the rise.
