Young buyers green and tech-savvy, but sneaky
September 27, 2019
Millennials—consumers aged 19 to 34—are Canada’s biggest first-time buyer market but veteran developers may have to change what they build and how they market to capture a share of the sector, according to a national study .
Builders and lenders must also be sure that these buyers have the resources to purchase—millennials are also nearly twice as likely to fudge the truth on mortgage applications than older buyers, according to new, separate data from Equifax.
A 2019 trends report by Re/Max found that millennials dominate first-time buyer action, with most favouring condos, being tech-savvy and leaning more towards environmental concerns than other buyers.
Home builders aiming at first-time buyers should therefore build and market new homes stressing energy-efficient and “green” features such as electric-vehicle charging stations or car-sharing options, the Re/Max report suggests. Smart control systems for lighting, heating and security are also preferred by millennials.
And open space designs for entertaining are popular. In new condo projects, this can translate into guest suites available to owners since modern condos often have a smaller square footage than in the past.
As for location, millennials express a desire to live in central urban neighbourhoods, but will accept suburban locations with close proximity to good transit and outdoor recreation such as hiking and bike trails, parks and sport venues, according to the Re/Max report.
Equifax, however, cautions that such younger buyers are not above inflating their income on mortgage applications—a type of fraud—to secure a loan. In a survey this year, Equifax found that nearly one in five (19 per cent) of millennial homebuyers admitted to inflating their annual income on their mortgage application. Nearly a quarter (23 per cent) of millennial homebuyers said they think this is an acceptable course of action which is nearly double the 12 per cent of all respondents who agreed that it is okay. Equifax noted that the requirements of the mortgage stress test may have persuaded more first-time buyers to fudge their income levels, but noted that this could lead to a rise in mortgage defaults if actual incomes can’t handle loan payments.