Six in ten Canadian millennials who do not own a home believe they one day will… but half say they will have to relocate.

According to a recent Royal LePage survey, conducted by Leger, 60 per cent of Canadian millennials, people aged 26 to 41, who do not currently own a home believe they will one day. Of them, however, 52 per cent say they would have to relocate in order to achieve this milestone; one their parents seem to have reached with greater ease. Canada’s chronic housing supply shortage continues to challenge buyers of every age, especially those looking to enter the market.

When broken out by age, 62 per cent of respondents under the age of 35 say they believe they will own a home one day, compared to 56 per cent of those aged 35 and up. Meanwhile, 25 per cent of non-homeowner millennials across the country do not believe they will ever own a home.

“Many Canadians who are in the stage of life where homebuying is a top priority, especially younger millennials, remain committed to achieving home ownership and are optimistic about the opportunities that lie ahead, due in large part to the example of their parents and family members who have reaped the benefits of our nation’s historically strong real estate market,” said Phil Soper, president and CEO, Royal LePage. “Currently the largest proportion of our population, and so arguably the most impactful, millennials are a resilient group who are willing to make the necessary sacrifices in order to reach this milestone.”

According to the survey, 57 per cent of Canadian millennials are already homeowners. That figure is higher among those aged 35 and up (63%). And, 51 per cent of the cohort plan to purchase a home within the next five years – whether their first home, a move-on property or a secondary residence – which means more than 4 million young Canadians will be looking to make a purchase between now and 2027. Almost half of them (45%) will be first-time homebuyers. Of the millennials who plan to buy their first home or sell their current home and move within this period, 47 per cent say they will remain in their current city or town, while 41 per cent say they plan to relocate.

“The need for a significant increase in the supply of housing in Canada has not gone away. While we are currently seeing a slowdown in market activity, as prospective buyers temporarily put their home purchase plans on pause while they seek to understand the full impact of rising interest rates and inflation on their bottom line, we expect that activity will rise again, although not at the same rate we saw throughout 2021 and early 2022. The return of these sidelined purchase intenders, a growing population, largely from increased immigration levels, together with household formation changes – individual households made up of boomer parents and their millennial children evolving into two, three or four households – will require more available housing stock to ensure a balanced market and to help bring affordability back within reach of many Canadians,” continued Soper.

Competition for properties and the prevalence of multiple-offer scenarios may have eased in recent months, however, young buyers continue to face significant challenges, as the cost of borrowing has become a barrier to affordability for many first-time buyers.

“Policy makers should take note that between millennial demand, immigration and the growing pipeline of those who could not transact over the last two years, more supply is required. We could see another surge in price appreciation, following short-term economic softening, when these sidelined purchase intenders transact.”

According to the survey, of the millennials in Canada who do not own a home, 68 per cent feel that home ownership is important. That figure is higher among those under the age of 35 (72%).

“While affordability remains a challenge, Canada continues to see strong demand from millennials who, like their parents, see home ownership as a right of passage. The desire to be a homeowner remains strong among Canadians of all ages. Despite the harsh reality many young people are facing – that buying their first home today is more difficult than it was for their parents – the majority still value home ownership and see it as a long-term investment in their futures,” said Soper.

In a 2021 survey of Canadian boomers, Royal LePage found that 25 per cent of those aged between 57 and 76 would help, or have already helped, their children financially with the purchase of a property.

When it comes to relocation, 72 per cent of millennials in Canada say that if the cost of living was not an issue, they would choose to continue living in their current city or town. However, 46 per cent do not believe their salaries will increase at a rate that will allow them to buy a home in their current location. This result appears to be reflective of lifestyle choice, rather than proximity to their place of work. Forty per cent of millennials say they would change employers to be able to work fully remotely. The top motivators for wanting to work from home are high commuting costs, long commuting times and traffic, and the ability to manage household duties while working from home.

“Employment and migration trends have intersected with real estate market trends over the last two years. The irreversible impact that the pandemic has had on our workforce and the manner in which employees do their jobs sparked a shift in the mentality of many Canadians, especially young professionals, who are reprioritizing their lives and their plans for the future,” said Soper. “Strong real estate demand is no longer concentrated in the major centres, but has expanded to many suburbs and exurbs where homebuyers can purchase larger, more affordable properties, as the tolerance for commuting wanes and the desire to have more flexibility in the hours and location one works increases.”

Twenty per cent of millennials in Canada say their ideal work/life scenario would be to live outside the city and work fully remotely; the most popular answer of all options offered. The second most popular option is to live in the city and work fully remotely (14%).

Ontario

• 68% of non-homeowner millennials in Ontario say that home ownership is important to them, and 53% believe they will one day own a home
• In Toronto, 80% of millennials say if the cost of living was not an issue, they would choose to continue living in their current location   
• In Ottawa, 54% of millennials who do not currently own a home believe they will one day

Ottawa

In Ottawa, 54 per cent of millennials who do not currently own a home believe they will one day. Meanwhile, 33 per cent of non-homeowner millennials in the city do not believe they will ever own a home.

“Millennial buyers in Ottawa still value home ownership despite waning affordability in the region. They are willing to expand their geographical search if it means they will have an opportunity to purchase, allowing them to build equity and establish a sense of security,” said Adam Ricci, sales representative, Royal LePage Team Realty.

The survey found that 53 per cent of millennials in Ottawa are already homeowners. And, 60 per cent of the cohort plan to purchase a home within the next five years. Of those who plan to buy their first home or sell their current home and move within this period, 54 per cent say they will remain in the city, while 35 per cent say they plan to relocate.

“Prior to the pandemic, neighbourhoods further outside the city centre were priced more affordably than downtown. Today, as more residents have the option to work remotely, or in a hybrid work schedule, price variations have narrowed. As a result, young buyers are willing to relocate even further from the city’s core and commute in order to purchase a property with more space,” said Ricci.

Seventy per cent of millennials in Ottawa say that if the cost of living was not an issue, they would choose to continue living in the city. However, 45 per cent do not believe their salaries will increase at a rate that will allow them to buy a home in their current location. Twenty-seven per cent of respondents say their ideal work/life scenario would be to live outside the city and work fully remotely; the most popular answer of all options offered. The second most popular option is to live in the city and work fully remotely (15%).

“I would advise this demographic to get creative with their buying strategy. It’s become more common for buyers to enter the market with friends or partners, or to purchase a duplex to live in one unit and have the other unit supplement mortgage payments. There are a number of ways young buyers can maximize their purchase and build equity in the long-term.”

According to the survey, 69 per cent of non-homeowner millennials in Ottawa feel that home ownership is important.

Sources: 

https://blog.royallepage.ca/six-in-ten-canadian-millennials-who-do-not-own-a-home-believe-they-one-day-will-but-half-say-they-will-have-to-relocate/?

https://www.royallepage.ca/en/realestate/news/six-in-ten-non-homeowner-millennials-in-canada-believe-they-will-one-day-own-a-home-but-half-say-they-would-have-to-relocate-royal-lepage-survey/