Canada's Condominium Magazine
It is no secret that the housing shortage and changes to loan structure and accessibility have made the dream of owning a home difficult for many in the Greater Toronto Area. Ontario has addressed concerns and attempted to provide a solution through its growth plan with a strong emphasis on high-rise apartment buildings and condos.
Over a million millennials in the Greater Toronto and Hamilton Area still live with their parents — long past the normal “leaving nest” age. In the next ten years, it is demographically estimated that 700,000 of these “late nesting” millennials will look to move to their own homes, and are currently saving for that goal.
Urban planners need to ensure these numbers are anticipated in land-use planning and approvals. It represents good news/bad news: good news for the future values of housing for current owners; bad news for buyers if the inflationary pressure of a massive cohort moves into the market — unless there is sufficient housing for them. Condos and apartments are one answer — the so-called build-vertical method — and spreading out into the burbs for those who must have a patch of green grass.
Extensive demographic research
A recent report by Ryerson University’s Centre for Urban Research and Land Development detailed extensive demographic research which showed that millennials in the Greater Toronto and Hamilton Area are on track toward homeownership. Despite facing a struggling market and an inability for many to meet mortgage qualification requirements, millennials have shown that they are sticking it out and working hard to achieve their goals.
“What we found is their needs and wants seem to be not that much different than generations before, particularly the baby boomers,” said the report’s main author, Frank Clayton.
Some of those millennials, however, are adamant about the types of homes they are wanting, with a strong preference for detached housing and ground-level, low-density units — the future burb house-owners. “Millennials want and desire low-density housing much more than high-rise apartments, and unless we provide those units, the prices will continue to escalate.”
The report found that the rate of homeownership among millennials is anticipated to increase from 40 to 60 per cent by 2026. Over the next ten years, millennial households will grow by 500,000. Approximately 350,000 of those are expected to become homeowners.
The report also noted a significant gap between millennials in their 20s versus those in their 30s. “The conventional wisdom right now seems to be that millennials are excited about being downtown where the action is,” said Clayton. “But these are all things that people in their 20s want to do, and that’s where the thrust of the millennials are. As they age and move up the income ladder, they seem to be getting married or living common-law… starting to have children.”
Millennials have traditionally moved to high-rise condos
Whereas millennials have traditionally gravitated toward high-rise condos, this report shows a shift may have occurred for some millennials — drawing them toward suburban life. “The appeal of the City of Toronto to millennials is likely to fade as they age and begin to prioritize affordable housing and space over proximity to work and amenities,” read the report.
In other words, those millennials able to enter the market in their 20s are more likely to invest vertical, then later sell for the burbs. They may have an advantage over those who wait, if their condos and vertical house rise in pricing on increasingly short supply. Those in their 30s may prefer the burbs and green grass — but can’t afford it — and some of these still live with in the parent nest.
Unfortunately, as space is becoming more and more limited and prices are skyrocketing, it may be a while yet before these dreams are realized, unless some significant changes are made or alternative housing options become available that offer the best of both worlds.