Millennials now make up the largest population demographic in Canada and not surprisingly they now make up the largest group of homebuyers. On average, more than 40% of homes across Canada are currently owned by people who are younger than 35, according to a recent Economic Research report.
Home buying is a priority for millennials. Of these current homeowners, 66% were first-time buyers but 33% have already purchased their third and fourth homes. A majority (68%) say they will use their first property as a gateway towards a better home.
This demographic now has a large influence on the Canadian economy and likewise is making a big impact on the Canadian real estate market. Compared to previous generations, however, millennials have a different outlook on real estate, face different challenges, have different needs and wants, and most notably are taking different approaches to get in the market.
Whether you fit the age bracket or not, the trends affecting and driving this group are having an impact on all of our decision making. Here are five trends that are changing the home-buying environment.
1. Multi-generational living
For many, the reality of home buying isn’t as straightforward as it used to be. In response, millennials are embracing different modes of homeownership, even if that means living with mom and dad. However, while they are living at home longer, many millennials have a plan. As parents get older or consider downsizing from the family home, millennials are stepping up to make a co-living and co-purchasing arrangements with the long-term goal of taking over the property according to the Real Estate Investment Network. Many are also finding ways to optimize their family homes by investing in self-contained basement apartments or laneway homes.
2. Tapping the social economy
In the quest for affordable homeownership, some millennials have turned to creative and flexible alternatives to traditional homeownership to save money and even generate income. And it’s not just rental suites, but many are purchasing multi-bedroom homes to house rent-paying roommates. Others are looking to co-owning with friends to go in on homes that they couldn’t afford as an individual or couple. Short term rental options like Airbnb are also part of this strategy. As a result, potential buyers in this category are searching for options like laneway homes, livable basement suites, main-floor master bedrooms, and condos with lock-off suites or separated master bedrooms.
3. Modern urban living and all its features.
Lifestyle is often, but not always, a priority for millennials. Many millennials are drawn to modern urban living and all the associated features and amenities. Factors like proximity to work, access to parks and walkable neighbourhoods are all part of the millennial decision-making, which makes amenity-rich condominiums in urban centres a common draw.
In terms of design, millennials are looking for unique interior designs such as open floor plans, multi-purpose rooms, and functional outdoor spaces. Unique amenities like electric vehicle stations, car-sharing networks, dog wash stations, and doggy parks are also becoming increasingly popular.
4. Smart, green and energy-efficient homes
Rightfully so, millennials are a generation that takes the climate crisis and environmental responsibility very seriously. And they want their homes to reflect this commitment and demonstrate energy savings and a reduced environmental footprint. This points to eco-friendly features like good insulation, efficient lighting and updated plumbing systems.
This infamously tech-savvy cohort is also driven towards smart home technology, driving builders and sellers to include upgrades like smart thermostats, intelligent lighting, home security and complete smart home systems.
5. Vacation homes are on the move
While often priced out of owning homes in major centres like Vancouver and Toronto, other millennials are taking the leap to affordable recreational properties outside the city limits. In fact, according to RE/MAX, 56% of millennials are in the market to purchase a recreational property—and the number is growing.
It’s an affordability issue, but the trend also represents this generation’s desire for outdoor recreation and a better work-life balance.
As baby boomers slowly step aside, millennial real estate trends are the leading force in shaping Canada’s housing market. And as they age and continue to grow their purchasing power, their influence on the market will only expand. Whether you’re over or under the age of a “Millennial”, you need someone to turn to when it comes to making real estate investments. We’re here to help. With a roster of mortgage brokers across Canada to help you achieve your homeownership goals and an internal team here to help, contact MCAP for all your mortgage financing needs.
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