Tag: Millennials

It comes as no surprise that the crazy state of Toronto’s housing market, with the increased value of homes and condos sitting at 30% or so from this time last year, is causing many first time home buyers and young homeowners to have buyer’s remorse.

The Huffington Post recently published an article that featured a survey conducted by CIBC, which only included millennials (aged 18-34) respondents. The findings were:

• 52 percent of millennials who don’t own a home believe they will never own one, or doubt they will ever be able to afford one
• 81 percent who owned a home plan to sell it; four in 10 plan to upgrade. 63 percent say it is due to the mortgage and housing costs.
• 57 percent worry about rising interests rates giving them trouble with their mortgage payments
• 36 percent believe renting is “the better option”

Additionally, CIBC’s research reveals that 38% of the Canadian millennial generation already owns a property, forty-two percent rent and 19 percent live with family.

For millennials who do not own a home yet:

• 23 percent say they’ll never own one
• 29 percent doubt they’ll be able to afford one

Millennials & The Housing Bubble

When questioned about the housing bubble, the opinion was almost split down the middle:

• 54 percent believe prices won’t drop
• 40 percent believe prices will fall within 5 years
• 4 percent believe they’ll drop within the next year

For those who own a house and were questioned about selling, this was their response:

• 62 percent are reluctant to sell because they fear what they’ll be able to afford in this high-priced market

The ongoing, seemingly never-ending struggle that millennials are currently faced with, is essentially due to the overwhelming number of baby boomers in Toronto. They are looking to not only make some money in this hot Toronto real estate market, but also are reaching the point to which they want to downsize – looking to condos, smaller homes, or retirement homes.

Seeing as the homes that baby boomers possess are untouchable to most first time home-buyers, people looking to get into their first home, generally look to houses outside of the GTA or condos.

Most news outlets have been focusing on homes in the Greater Toronto Area (GTA) going for hundreds of thousands of dollars over their asking price, however, condos have been seeing much of the same. This is due to the interest of all parties: baby boomers, millennials, foreign investors, and other individuals looking to purchase real estate.

With the amount of competition for real estate in Toronto, many people with little capital (millennials) are unable to outbid those who possess it (baby boomers or foreign investors). Situations such as this (as well as interest rates, banks, etc.) are what have made millennials become discouraged when even thinking about homeownership, as seen from the study results earlier in this post.

For now, however, we all will have to see what will happen to the market, whether the bubble will burst, or prices continue to climb.

If you are in need of a real estate lawyer, please visit our Real Estate Page and contact one of our Real Estate Lawyers today. For any other legal services or inquiries, please contact Devry Smith Frank LLP directly at 416-449-1400 or visit our website for more information.

“This article is intended to inform and entertain. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.”