Montreal real estate: Most millennials dream of buying a house
Real estate industry players have got millennials on the mind. Most members of this generation — the oldest of whom were born in the early 1980s and the youngest in the early aughts — have now reached adulthood. Inquiring minds want to know: What impact will their choices have on Canada’s real estate market?
Findings made public this month from two surveys of millennials and Gen Xers found that the stereotype of the millennial spendthrift who is more interested in Ubering to Instagram-worthy selfie spots and booking Pinterest-worthy Airbnbs than investing in a home is unfounded.
In fact, both reports found almost all millennials dream of one day buying a home. But with home prices rising faster than salaries, many of these young families simply haven’t been able to get a toehold in the market.
It’s not just a problem in Vancouver and Toronto. While Montreal is a much more affordable city, with home prices about a third the cost of those in Lotusland or The Big Smoke, young adults here say it’s hard to scratch up a down payment after covering living expenses and paying down debts.
On Feb. 7, professional associations representing Quebec’s construction industry, provincial real estate boards and the real-estate investment arm of the Quebec Federation of Labour’s Solidarity Fund released the findings of a Léger poll of millennial buying intentions in the Montreal CMA.
The survey found 83 per cent of Montrealers between the ages of 18 and 34 intend to buy a home one day, and half said they plan to take the plunge within the next five years. One in 10 is thinking about buying an investment property.
Most said they hope to buy a single-family home that they can renovate, since these properties are typically less expensive than new construction. The average reno budget for those considering a fixer-upper was $15,200.
One interesting takeaway: Millennials surveyed were torn between urban and suburban living. Slightly more than half of the 18- to 34-year-olds polled said they would prefer to live in the downtown core. At the same time, 58 per cent pined for a single-family home, and most of those who had already put down roots in the suburbs said they would not move back to the city.
On Wednesday, Sotheby’s International Realty Canada released the third report in its series of home ownership trends among young adults ages 20 to 45, which included some Gen Xers in the analysis. The report’s findings are based on surveys conducted by the Mustel Group.
The report dug into what these young adults are doing to achieve their dreams of home ownership. Belt-tightening was the most common strategy, with almost half of Montrealers cutting back on dining out, and almost as many reducing expensive vacations, personal spending and entertainment.
Almost one in five said they have put off saving for retirement, 11 per cent have delayed having a child, and five per cent moved back in with family in order to save for a down payment.
Others have set their sights on making more money, with 16 per cent seeking better-paid employment, and 12 per cent clocking in extra hours at a side hustle or second job.
About half of young Canadian home buyers in the survey got some money from family to help them get into the market; however, in most cases inheritances or financial gifts made up less than 30 per cent of the total down payment.
One-quarter of Montrealers surveyed said they had difficulty saving for a down payment because they had little money left after covering basic living expenses. (The percentage was noticeably lower than Calgary, Vancouver and Toronto.)
According to Sotheby’s Canada president and CEO Brad Henderson, Millennials and Gen Xers understand the value of investing in home ownership, but have to work harder than past generations to achieve the dream.
“A lot of Millennials would love to have a single-family home. They would love to have that lifestyle, but it’s becoming increasingly out of reach,” Henderson said.
“They haven’t given up on the dream, but it is a little bit harder to achieve because of the increase in cost of living.”