The way those of Generation Y think about investing in real estate is very different compared to their parents, the baby boomers. Generation Y, also known as ‘millennials’, consist of those who are entering their prime home buying years and who are expected to drive a favorable change in the real estate market. With close to 76 million millennials comes millions of potential first-time homebuyers. However, due to an increase in prolonged renting, will this generation ever be interested in owning their own home?
While in the past it was common practice for baby boomers to purchase suburban homes for their growing families, it has become increasingly different for those of Generation Y. Today, life’s milestones such as purchasing a house have been shifted to a few years later due to factors such as simply not having the funds because of student loans, other debts, and unemployment. This unfavorable financial situation is not only characterized by the potential buyers, but also by the changes in the market. The price of a home in Canada, resold or new, averages about $439,144 according to the Canadian Real Estate Association, a drastic increase compared to what homes averaged during the baby boomer generation. Evidently, there are many forces working against the millennials’ financial feasibility to invest in a home. However, because of the lack of ability to buy their own home, the option of renting has increased.
What the renters of Generation Y look for in a unit has steered towards that of ‘quality over quantity’. Smaller spaces are being rented for bigger bucks and this has caused real estate developers to focus on building more apartment complexes, as opposed to more homes. What is behind the quality over quantity mantra, exactly? Millennials, especially in urban centers, have begun to prioritize their lifestyle over comfort, choosing to live in shoebox apartments to be closer to work rather and friends than a spacious townhouse out of the city. It has become more important for them to live in a community that matches the lifestyle they wish to live, whether it be the laid-back atmosphere of Whistler Village or the exciting hustle and bustle of downtown Vancouver.
This being said, once the families of Generation Y begin to grow and the need for more space becomes prominent, owning their own home will become more desirable. It is clear that Generation Y will have a major impact on driving the real estate market forward; the question is will it be sooner? Or will it be later?
To stay up to date on the market and trends, connect with us through our social media pages! (See widgets below)
All Articles More Like This