The dream of home-ownership is changing, and it’s the millennial generation who are turning things around. Compared to their baby boomer parents at the same age, 30-year-old Canadians are less likely to own a home, which has resulted in a modest but clear drop in the national homeownership rate.
Millennials Are More Likely to Rent Than Buy
Back in the day, at age 30, 55 percent of baby boomers were homeowners. By comparison, only 50.2 percent of young Canadians nowadays own their homes. According to Statistics Canada, millennials are also more likely to live in apartments and even at home than in single-detached homes.
The way Canadians perceive real estate is changing, claims Graham Haines, research and policy manager at the Ryerson City Building Institute in Toronto. The home-ownership rate in Canada dropped from 69 percent to 67.8 percent from 2011 to 2016. In raw numbers, this means that out of 14.1 million households captured in the 2016 census roughly 9.5 million owned their homes.
Homebuying is Inaccessible, but so is Renting
Over the same period of time, the national average price grew to $443,058 from $345,182. Homes for sale in Vancouver are the most expensive, with an average selling price that exceeds $1 million. Toronto real estate comes in second at $734,924, followed by Calgary at $527,216 and Montreal at $366,974. As prices have risen, so has the percentage of renters, even though, nationally, the supply of purpose-built rental units has been on a decline.
While it might seem that renters are better off compared to homeowners, this isn’t the case. According to the National Post, they tend to be more financially burdened. Around 40 percent of the renters captured in the census spend more than 30 percent of their monthly income on housing. By comparison, less than half the number of homeowners – only 17% – spend that amount.
Overall, affordability remains an issue in Canada, with almost a quarter of Canadian households being affected by it, according to the National Post.
Policy-Makers Working on Creating Renter-Friendly Accommodation
While promoting homeownership has been top of the agenda for policy-makers for quite a while, as times are changing, Haines suggests, they should focus more on the rental sector. This means building the right type of rental and making sure it’s accessible to people who will be needing it.
Haines also predicts that homeownership will become more widespread among millennials in the coming years, as they start families and look for stability. Simultaneously, baby boomers will be looking to downsize, and two-bedroom apartments – the scarcest type of unit on the market – will be most in demand.
The federal government plans to address these issues as part of an $11.2 billion, 11-year housing plan to be released in the coming weeks. Part of the plan includes building new affordable housing, and catering to the needs of both renters and homebuyers.
According to Haines, the good news is that measures are being taken to recognize and accommodate people’s needs. He suggests that more family-friendly units should be built instead of studios and one-bedroom units, which have been more popular with investors than with end users.
Source: National Post