Millennials: most can’t afford to buy
August 21, 2017
|Phil Soper, president and CEO, Royal LePage: “Millennials want to buy a home.”|
While “peak millennials” (those now aged 25 to 30) are often seen as the future of Canada’s new home consumers, a new survey shows that few of them can afford to buy a home and nearly 25 per cent would not qualify for a mortgage.
In a sobering study done for Royal LePage, 64 per cent of Canadian millennials believe that homes in their area are unaffordable, with a significant proportion in both British Columbia (83 per cent) and Ontario (72 per cent) asserting that prices are simply too high.
Of those that do not believe they will be able to own a home in the next five years, 69 per cent stated they cannot afford a home in their region—or afford the type of home they want—while 24 per cent said they are unable to qualify for a mortgage.
The number of people aged 25 to 30 is projected to increase 17 per cent in 2021 compared to 2016.
“Whether they choose to buy or rent, peak millennials will inevitably shape the housing market due to their sheer volume,” said Phil Soper, president and CEO, Royal LePage. “We expect demand from this demographic to put additional pressure on entry-level housing and investment properties being used to supplement the limited inventory of purpose-built rental buildings.”
The cross-Canada survey conducted by Leger found that 87 per cent of Canadians aged 25 to 30 believe homeownership is a good investment. Yet, while 69 per cent hope to own a home in the next five years, only 57 per cent of those surveyed believe they will be able to afford one.
“Millennials want to buy a home,” Soper told Home BUILDER magazine, “but they must overcome some unique barriers.”
Soper said many millennials, through diligent saving, moving to suburban markets where prices are lower, and perhaps pooling their resources with others, will still go on to represent the largest home buyer demographic over the next five years.