Millennials have faced historically different challenges when it comes to building wealth than previous generations have. This time last year, a poll by global accountant KPMG showed that almost half of Canadian millennials (46%) thought that becoming a home owner in the near future was a “pipe dream.” Fast forward to March 2021, and things have taken an interesting turn. While the wealth building challenges haven’t changed, the market, real estate processes, and world at large sure have and the resulting shift has presented the perfect storm for young buyers.
According to a recent survey from Royal LePage, nearly 48% of Canadians aged 25 – 35 currently own their home, and one quarter of these homeowners purchased a property during the pandemic. Some of the measures necessary to prevent the spread of COVID-19 may have actually driven young Canadians to buy, as many were sharing spaces with parents, siblings or roommates and became uncomfortably crowded with work-from-home being part of our new routine.
As an added bonus, millennial buyers are very comfortable in the digital realm so when the industry began to change via virtual home tours and electronic contracts, the transition was easy for them. Plus, with experience-based opportunities at an all-time low (i.e. concerts, travel, social gatherings), 40% of millennials reported that their savings significantly increased since the onset of the pandemic.
What may have once been an industry far out of reach for young Canadians, the ever powerful housing market is now at the centre of an interesting shift. As historically low interest rates make the housing market more attractive to young buyers, millennials are taking advantage of the extra savings and low borrowing costs to invest in property. Something they’ve wanted to do for years but could never quite manage, due to wildly high debt-to-income ratios. While wages haven’t increased, other external factors brought on by COVID-19 have made the transition to homeownership a reality for many Canadian millennials.
Ontario alone is reporting that 44% of residents aged 25 – 35 now own a home and of them, 26% have purchased since mid-March 2020 when the pandemic began to take hold of Canada and the world at large.
While there’s no way of knowing for sure what the future of the real estate market holds, current trends suggest Canada should see healthy housing price growth in 2021. But who knows what will happen when the last vaccines are administered and the world begins to move toward some sense of familiarity. In the meantime, Millennials will continue to flood the market in a last-ditch effort to leverage this unique opportunity and finally purchase their very first homes, something they’ve been trying to do for a decade.
Want to get in on the home buying adventure but aren’t sure where to start? Contact us to learn more about how we can help!