Canada’s housing market is amazingly both on fire and in need of changes in order to meet the needs of future homeowners. In major cities like Toronto and Vancouver, prices are steadily increasing along with sales, but young buyers are finding themselves boxed out, leaving the idea of home ownership as little more than a pie dream.
According to reports this year, average salaries for the 18 to 3 age group have remained stagnant since the 1980’s while every other age group above has seen steady gains. What’s more, millennials now have less access to quality benefits through employers, giving older generations another advantage.
The market outlook puts millennials in an even more precarious position with five-year projections seeing many large Canadian cities set to see increases in housing prices of more than five percent. Demand is expected to remain high while interest rates and mortgage stress tests are forming a perfect cocktail to keep millennials in the rental market for the foreseeable future.
While the market is indeed booming, millenials are disproportionately affected in a negative way and one might ask how long the market can sustain this way given millenials are now the majority age group. A recently elected Liberal minority will need to rely on mostly NDP support to advance its agenda. Both parties have promised changes to housing policy with the goal of providing more affordable housing in both the ownership and rental markets.
Today’s changing economy is causing drastic changes in the way young professionals are making money, with many oftentimes working multiple jobs. Many believe buying a home is well beyond their financial purview, but perhaps Canada’s recent economic growth and forward-thinking housing policy just may deal some much needed relief for millenials looking to enter the market. Affordability will be a key market driver over the long term outlook, according to a recent PwC report.
Purpose-built, affordable housing will be required for commercial, single-family homes and apartments for all age groups which could spell a remedy for millennials in the years to come. With Canada’s major cities set to continue the boom while continuing to attract younger people to drive new the rapidly evolving digital economy, solution s must be put in place in order to meet their living demands.