Millennials Compete With Seniors for Prime Real Estate  Millennials Compete With Seniors for Prime Real Estate


Millennials Compete With Seniors for Prime Real Estate

Written By: Jim Adair
Monday, August 26, 2019

A recent report from Canada Mortgage and Housing Corp. CMHC says that rising homeownership rates among seniors in the Toronto area is making it tougher for younger generations to get into the market.

Author Inna Breidburg says that as Torontorsquo;s senior population grows at a faster pace during the next decade, ldquo;the conventional view is that this demographic shift will likely help to increase the supply of housing to younger homeowners, since seniors typically downsize or leave homeownership.rdquo;

But she says baby boomers are working longer than previously and have more wealth, as well as community supports that will allow older seniors to stay in their homes longer. ldquo;Thus, over the next decade, seniors might not be freeing up the expected number of dwellings for younger households thus limiting supply. Furthermore, the share of seniors preferring to rent ground-oriented homes may increase further, thus contributing to tighter market conditions in this housing segment,rdquo; says Breidburg.

In 2016, when the most recent census was conducted, seniors represented 14 per cent of the Toronto population, up from 11.3 per cent in 2006. That percentage is expected to grow to 18.2 per cent by 2026.

Seniors owned 25 per cent of the homes in the Toronto area in 2016, up from 20.4 per cent a decade earlier. The homeownership rate among seniors was 75.1 per cent in 2016, up from 73.4 per cent in 2016.

Breidburgrsquo;s report prompted a reaction from people who felt she was blaming boomers for the struggles that young people, particularly millennials, are facing in the real estate market.

A popular millennial internet meme says, ldquo;If I had a dollar for every time a baby boomer complained about my generation, Irsquo;d have enough money to buy a house in the market they ruined.rdquo;

A recent report by the Real Estate Intelligence Network REIN says millennials are the largest demographic in Canada, ldquo;which means their preferences will impact housing trends for years to come.rdquo;

The report says so far, the Prairie provinces are the only place where there are more millennial homeowners than baby boomer owners.

The report authors couldnrsquo;t resist adding a few jokes ldquo;Look at that millennial, walking around like he rents the place.rdquo;, but it says real estate investors must learn how to cater to this growing demographic. The homeownership rate for millennials in the GTA is expected to rise from 40 per cent in 2016 to 60 per cent in 2026.nbsp;

ldquo;We know that millennials want to purchase a home, but that means getting rid of student debt, having stable employment that pays well and saving for a down payment,rdquo; says REIN. ldquo;This cohort is living at home longer, delaying marriage and having children, and delaying their own home purchase. Millennials are more likely to purchase a condo or townhome in an urban centre with good transit and amenities that supports their individual life>

The report says as of June 2018, 35 per cent of Canadian millennials were living at home. The increase in the number of intergenerational homes shows that rather than hurting millennialsrsquo; real estate prospects, many baby boomers are helping them by allowing them to save money while living at home. Itrsquo;s a win-win. Seniors get to stay in their homes longer with live-in support, while young people have time to build a nest egg.

This is also part of the reason why seniors are taking on more mortgage debt than they did a decade ago. The CMHC report says 26 per cent of all senior homeowner households in Toronto had a mortgage in 2016, up from 20.5 per cent in 2006.

ldquo;The known reasons for having a mortgage at an older age was financing in-place retirement, renovations, investments, as well as helping other family members,rdquo; says Breidburg.

The REIN report says millennials are ldquo;not necessarily looking for the same housing solutions as their parents or grandparents ndash; i.e. not the ranch bungalow in the suburbs.rdquo;

The report says the average age of a first-time mother has been steadily increasing since the 1970s and is over 30 in many parts of the country. ldquo;On average, it is only the first wave of millennials that has started to have children in the last few years. For a real estate investor, this translates into millennials not yet desiring a three- or four-bedroom house in the suburbs, instead preferring condo living in the urban centres.rdquo;

However, a shift may be in the works as affordable real estate becomes harder to find in the cities. ldquo;The number of millennials moving out of Toronto and Vancouver for less expensive areas of their province is trending upward,rdquo; says the report. ldquo;Family is important to this generation, despite their delay in marriage or having children, so theoretically, eventually millennials may shift to suburban living, or at minimum, larger dwellings with multiple bedrooms, in greater numbers.rdquo;

Breidburgrsquo;s report says among renters, the income of seniors was less than younger generations.nbsp;

ldquo;Historically, across all age groups, homeowner households tend to have higher incomes compared to renters,rdquo; she says. ldquo;However, over the past years more young professionals with high earnings have been renting in Toronto, thus contributing to a decrease in the income gap between renters and homeowners in the younger cohorts. For seniors though, the income difference between renters and homeowners widened further.rdquo;

nbsp;





Copyright© 2019 Realty Times®. All Rights Reserved
BELHOUSE INTERNATIONAL
ICON Bay
900 Biscayne
Press & Awards
Updated: Friday, September 20, 2019

The 9 Best Tips on How to Find...
Tip 1: Buy a Property in a Top Real Estate MarketAnyone in the real estat...

USDA Loans: Theyre Not Just fo...
If yoursquo;re saying to yourself, ldquo;But USDA loans are only for homes out in the sticks...

Copyright ©2019Realty Times®. All Rights Reserved

Miami ranks in the top 50 for most livable cities in the world for 2019
By Rebecca San Juan September 05, 2019 06:00 AM, Updated September 05, 2019 01:07...

Home sales surpass national average growth in South Florida
By Rebecca San Juan August 23, 2019 06:00 AM, Updated August 23, 2019 04:31 PM   Sales...

5 razones financieras para comprar una casa según Harvard
De acuerdo a  “The Dream Lives On: the Future of Homeownership in America”....

Comprar vs Rentar
Estas son las ventajas y desventajas entre comprar o rentar, tenga en cuenta cada una de...

Miami’s flying car port is almost finished. And the flying cars are not far behind.
By Rob Wile May 17, 2019 06:51 PM, Updated May 19, 2019 08:57 PM     Read...

Miami, una de las ciudades más deseadas para invertir
Contenido Comercial | Publicado el 27 de junio de 2019 elcolombiano.com   Ubicada...

new Miami apartment complex will make it easier for you to rent
By Bianca Padró Ocasio A new downtown Miami high-rise being unveiled Tuesday...

Belhouse International In Russia, Poland, And Czech Republic
Belhouse International next stop will be in Warsaw Poland  June16/17/18, Moscow...

Rich New Yorkers are fleeing to Miami to escape high taxes.
Katie Warren     More and more rich New Yorkers are ditching the northeast...

BELHOUSE Y SU EXPANSIÓN POR EL MUNDO
Belhouse International en los últimos 3 años se ha focalizado en una dinámica,...

Resource Center
Client Login
Receive Email Alerts