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 Français
- 72% of millennials in Canada would choose to continue living in their current city or town, if the cost of living was not an issue
- 40% of millennials in Canada say they would change employers to be able to work fully remotely; top motivators include the cost and time associated with commuting
- 68% of non-homeowner millennials in Canada say that owning a home is important to them
- Nationally, more than 4 million millennials (51%) say they plan to purchase a home within the next five years
- Royal LePage urges policy makers to remain focused on efforts to increase supply of housing in Canada, despite cooling market
- Survey chart includes national, provincial and city-level data
TORONTO, Aug. 24, 2022 /CNW/ - According to a recent Royal LePage survey1, 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."
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1 An online survey of 2003 Canadian millennials aged 26-41 was completed between June 10, 2022, and June 16, 2022, using Leger's online panel. Weighting has been employed to ensure that the sample composition accurately reflects the adult population of Canada, as per the latest Census Data. No margin of error can be associated with a non-probability sample (i.e. a web panel in this case). For comparative purposes, though, a probability sample of 2003 respondents would have a margin of error of ±2.2%, 19 times out of 20. |
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 million2 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.
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2 Population data from Statistics Canada 2021 Census, https://www12.statcan.gc.ca/census-recensement/2021/as-sa/98-200-X/2021003/98-200-X2021003-eng.cfm |
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 property3.
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%).
Royal LePage 2022 Demographic Survey: Canadian Millennials - Data chart: rlp.ca/table_2022-millennials-report
In the Greater Toronto Area, 59 per cent of millennials who do not currently own a home believe they will one day. Of them, however, 63 per cent say they would have to relocate in order to achieve this milestone. Meanwhile, 28 per cent of non-homeowner millennials in the region do not believe they will ever own a home.
"This generation of Torontonians overwhelmingly desires to be homeowners, and many of them are willing to make concessions in order to get on the real estate ladder," said Tom Storey, sales representative and head of The Storey Team, Royal LePage Signature Realty. "Ideally, they would be able to work fully remotely and have the option to purchase wherever necessary to find a property within their price range. For those who have to be close to their place of work in the city, settling for a small condo is a common alternative."
Storey recommends that first-time buyers consider making a purchase together with a friend or partner, and says buying what you can afford in order to get into the market should be prioritized over landing your dream home on the first try.
The survey found that 56 per cent of millennials in the GTA are already homeowners. And, 58 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, 47 per cent say they will remain in their current city or town, while 45 per cent say they plan to relocate.
"Millennials who were able to get into the market prior to the pandemic boom now find themselves able to upgrade, taking advantage of equity that has built up in their homes. First-time buyers will have to get into the market any way they can," said Storey. "With interest rates rising, even if your monthly payments are similar today to what they would have been in February or March on a more expensive property, your down payment is now significantly lower. In the long run, is it more beneficial to purchase at a lower sticker price than lower interest rates, which will be renewed every three to five years."
Eighty per cent of millennials in the Greater Toronto Area say that if the cost of living was not an issue, they would choose to continue living in their current city or town. However, 48 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-three 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 (17%).
"Despite affordability challenges, Toronto remains one of the most popular destinations in the country. In recent months, I've seen a strong resurgence of demand for housing in the city centre, as students and renters return to the downtown core," said Storey.
According to the survey, 74 per cent of non-homeowner millennials in the GTA feel that home ownership is important.
Royal LePage 2022 Demographic Survey: Canadian Millennials - Data chart: rlp.ca/table_2022-millennials-report
In the Greater Montreal Area, 82 per cent of millennials who do not currently own a home believe they will one day; the highest rate among regions surveyed. Of them, however, 55 per cent say they would have to relocate in order to achieve this milestone. Meanwhile, 12 per cent of non-homeowner millennials in the region do not believe they will ever own a home.
"It is encouraging to see that despite affordability challenges due to increases in home prices and interest rates, the desire to become a homeowner remains important for the millennial generation in the Montreal region," said Geneviève Langevin, real estate broker, Royal LePage Altitude. "Even if home prices have risen considerably over the past three years, Montreal's real estate market remains more affordable than Canada's other large urban centres, and the market slowdown that we are seeing right now provides hope to first-time homebuyers."
The survey found that only 35 per cent of millennials in the GMA are already homeowners. And, 61 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, 56 per cent say they will remain in their current city or town, while 38 per cent say they plan to relocate. Forty per cent of respondents in Montreal plan to buy their first property within the next five years.
"It is known that the Montreal Island includes a large population of renters, due to the nature of its housing stock, which is mainly made up of rental buildings and condominiums," said Langevin. "I believe that, for many millennials, the pandemic has created a greater sense of urgency to become a homeowner. Waning affordability has forced many young buyers to think more seriously about their future, which may include real estate as an investment and as a way to increase their savings."
Seventy-five per cent of millennials in the region say that if the cost of living was not an issue, they would choose to continue living in their current city or town. However, 54 per cent do not believe their salaries will increase at a rate that will allow them to buy a home in their current location. When asked what their ideal work/life scenario would be, 19 per cent of respondents said they would prefer to live in the city and work fully remotely, and another 19 per cent said they would prefer to live outside the city and work fully remotely.
"What this survey confirms is that a large number of millennials - whether they live in a city or outside of an urban centre - appreciate the option to work remotely. Instead of choosing a lifestyle based on the location of their workplace, they can prioritize their quality of life, taking into account both their personal and professional desires. To achieve this, some are choosing to leave the city, although this trend is less common today than it was at the height of the pandemic," concluded Langevin.
According to the survey, 78 per cent of non-homeowner millennials in the GMA believe that home ownership is important; the second highest rate among regions surveyed, following Vancouver.
Royal LePage 2022 Demographic Survey: Canadian Millennials - Data chart: rlp.ca/table_2022-millennials-report
In Greater Vancouver, 70 per cent of millennials who do not currently own a home believe they will one day. Of them, however, 51 per cent say they would have to relocate in order to achieve this milestone. Meanwhile, 21 per cent of non-homeowner millennials in the region do not believe they will ever own a home.
"Millennials in Vancouver are motivated to become homeowners and are open to living outside of the downtown core. Improved urban planning, access to transit and the option to work remotely, have made purchasing a more affordable property in the suburbs an attractive option for many young people today," said Adil Dinani, sales representative, Royal LePage West Real Estate Services. "Buyers look to find the opportunity within the changing market place. Despite rising interest rates, many young buyers who are educated about the market feel that home ownership is a worthwhile investment."
The survey found that 49 per cent of millennials in the region are already homeowners. And, 61 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, 50 per cent say they will remain in their current city or town, while 43 per cent say they plan to relocate.
"Young Canadians have seen their parents' investment in their home pay off in the long run, and they want to realize that same dream. Many of them are fortunate enough to have their families' financial support with their first down payment," said Dinani. "Slowing activity is presenting a moment of opportunity for first-time buyers trying to get into the market. Compared to earlier this year, there is significantly less competition today."
Seventy-eight per cent of millennials in Greater Vancouver say that if the cost of living was not an issue, they would choose to continue living in their current city or town. However, 58 per cent do not believe their salaries will increase at a rate that will allow them to buy a home in their current location; the highest rate among regions surveyed. Nineteen per cent of respondents say their ideal work/life scenario would be to live in the city and work fully remotely; the most popular answer of all options offered.
"The lifestyle that the west coast provides, including easy access to beautiful mountains and ocean, will always attract buyers to the province of British Columbia. In recent years, the price gap between Vancouver and Toronto has narrowed significantly, making the western city even more desirable. My advice to young buyers looking to get into the market today is to get informed and stay focused on your long-term objectives."
According to the survey, 79 per cent of non-homeowner millennials in Greater Vancouver feel that home ownership is important.
Royal LePage 2022 Demographic Survey: Canadian Millennials - Data chart: rlp.ca/table_2022-millennials-report
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.
Royal LePage 2022 Demographic Survey: Canadian Millennials - Data chart: rlp.ca/table_2022-millennials-report
In Calgary, 66 per cent of millennials who do not currently own a home believe they will one day. Meanwhile, 22 per cent of non-homeowner millennials in the city do not believe they will ever own a home.
"Millennials in Calgary are optimistic about home ownership, with first-time buyers beginning to feel more confident in their ability to enter the market. Despite the hike in interest rates, there is still strong demand from this group," said Doug Cabral, sales representative, Royal LePage Benchmark. "Although owning a detached property is the ultimate goal for many, a condominium has become a more attractive option as it is a more affordable product and an effective way to build equity."
Of the cities surveyed, Calgary has the highest rate of home ownership among millennials (68%). And, 54 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, 64 per cent say they will remain in the city; the highest rate among regions surveyed. Meanwhile, only 26 per cent say they plan to relocate.
"Calgary's affordability in recent years compared to other major cities across the country has offered greater opportunities for young first-time buyers to enter the market. Communities located outside the city centre remain within a comfortable commuting distance to the core, allowing those who have shifted to remote, or even hybrid work models, the opportunity to make a purchase based on a property's potential value in the future, rather than necessarily having to live close to the city centre," said Cabral.
Seventy per cent of millennials in Calgary say that if the cost of living was not an issue, they would choose to continue living in the city. However, 44 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-five per cent of millennials in Calgary say their ideal work/life scenario would be to live in the city and work fully remotely; the most popular answer of all options offered.
"I would advise young buyers not to hesitate if they are looking to enter the market, and to focus on long-term growth potential, rather than finding the perfect home as their first purchase. An attempt to time the market is rarely fruitful."
According to the survey, 75 per cent of non-homeowner millennials in Calgary feel that home ownership is important.
Royal LePage 2022 Demographic Survey: Canadian Millennials - Data chart: rlp.ca/table_2022-millennials-report
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An online survey of 2003 Canadian millennials aged 26-41 was completed between June 10, 2022, and June 16, 2022, using Leger's online panel. Weighting has been employed to ensure that the sample composition accurately reflects the adult population of Canada, as per the latest Census Data. No margin of error can be associated with a non-probability sample (i.e. a web panel in this case). For comparative purposes, though, a probability sample of 2003 respondents would have a margin of error of ±2.5%, 19 times out of 20.
Serving Canadians since 1913, Royal LePage is the country's leading provider of services to real estate brokerages, with a network of approximately 20,000 real estate professionals in over 600 locations nationwide. Royal LePage is the only Canadian real estate company to have its own charitable foundation, the Royal LePage Shelter Foundation, dedicated to supporting women's and children's shelters and educational programs aimed at ending domestic violence. Royal LePage is a Bridgemarq Real Estate Services Inc. company, a TSX-listed corporation trading under the symbolTSX:BRE. For more information, please visit www.royallepage.ca.
SOURCE Royal LePage Real Estate Services
Stephanie Matthias, North Strategic on behalf of Royal LePage, [email protected], (416) 802-1612
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