Affordability is the top criteria for young buyers in the GTA, however this cohort has needs and desires that are distinct from previous generations.

Jared Menkes, executive vice president of highrises at Menkes Developments, says projects like Mobilio in the Vaughan Metropolitan Centre are attracting the younger crowd by offering a direct TTC connection to downtown, more square footage than condos in Toronto and prices starting around $380,000. Plus, the development offers common spaces such as co-working areas, and condo gyms to match millennial lifestyles. Menkes adds that millennials care about community building, mixed-use neighbourhoods and being close to transit. 

Christopher Alexander, executive vice president of RE/MAX’s Ontario-Atlantic region, says condos aren’t necessarily what millennials are looking for, but are all they can afford since most of them are first-time homebuyers.

Places new… and old
While sky-high city prices have funnelled the flow of millennials into high-density downtown neighbourhoods, the cohort has also reshaped the older west end of the city in recent years. According to a February report from RE/MAX, millennials have helped gentrify “tired neighbourhoods” as they snapped up affordable resale homes. However, as those properties have become scarcer and prices start climbing again after a pause in 2018, the millennial trend to affordable condos and townhomes and high-density neighbourhoods will continue, RE/MAX says.

There are almost 500,000 millennials in Toronto, about 40% of whom own a home according to an RBC report from February. As they start having families, they start competing with other demographic groups for affordable, roomier housing and consequently they start moving farther out to areas like Peel, Waterloo, Simcoe, Durham and Hamilton.

Despite a longer commute to Toronto, Jesse Melo, real estate agent with RE/Max Escarpment Golfi Realty Inc., says Hamilton’s urban core charms the younger crowd, who always ask about the closest coffee shops and restaurants. But prices won’t stay low forever, prompting a millennial ripple effect to spread even farther out.

“There was a wave of buyers towards Hamilton and it’s still coming, but the next big spot is St. Catharines and the Niagara region in general, with Welland and Grimsby,” Melo says.

Challenged as they are for affordable housing, millennials have been forced to get creative.

“They go to great lengths, like buying cottages, moving outside of the urban centre, commuting in or even finding a new job in a different city to afford the type of home they really want,” says RE/MAX’s Alexander.

“They want to buy homes, want to start building equity and they believe in real estate as a safe investment over the longer term,” Alexander adds.

RE/MAX’s Alexander says while new mortgage rules make it harder for first-time homebuyers to be approved, it looks like the Bank of Canada won’t be changing the interest rate for the rest of the year, which means millennials shouldn’t wait around. “People get caught up in, ‘is it the right time to buy,’” he says. “It’s about time in the market, not the timing of the market.”

Source: National Post