By Twinkle Ghosh Global News | Posted February 25, 2021 11:43 am | Updated February 25, 2021 11:44 am
Nearly 48 per cent Canadians aged 25 to 35 currently own their home, and a quarter of these homeowners purchased a property during the coronavirus pandemic, according to a recent demographic survey by Royal LePage.
The pandemic has steered young Canadians along “a path to home ownership,” Phil Soper, president and CEO, Royal LePage, told Global News Thursday.
“As mortgage rates fell to historically low levels and the competition for entry-level housing lessened, young people saw
Even among non-homeowners, 84 per cent strongly intend to invest in a home in the future, with 68 per cent planning to make the move in the next five years, the survey shows.
Soper noted that measures necessary to prevent the spread of COVID-19 may have driven “many of our younger Canadians to buy” even as the health crisis “dissuaded” many of the older homeowners from selling.
“The living situation for some young people sharing with parents, siblings or roommates became uncomfortably crowded with work-from-home becoming a day-to-day reality. The opportunity, therefore, of owning 500 sq-ft worth of personal space was more than viable to most in the current market scenario,” he said.
Despite the economic challenges associated to the pandemic, Canadians aged 25 to 35, have shown a healthy personal outlook, according to the survey.
While nearly 92 per cent of those charted agreed that owning a home is a good financial investment, 40 per cent said that their savings have grown since the onset of the pandemic.
According to Soper, “no dining out, no concerts with friends or winter escapes to the sunny south” are liable for this actuality.
“The pandemic has restricted millennials in so many ways. With outdoor spending limited, savings have soared,” said Soper.
“All the unspent money,” he added, “have found its way into real estate investments.”
Furthermore, this young group has had no problem adjusting to the boosted use of virtual tours and electronics contracts set in motion by the ongoing pandemic, Soper noted.
“Younger buyers are extremely comfortable with online research, even when it comes to investing in a home, unlike older investors,” said Soper.
Older people are opting to “wait it out” and delay their “desire for a housing upgrade until the medical crisis is under control.”
In British Columbia, 49 per cent of residents aged 25 to 35 own their home with 27 per cent having purchased a home since mid-March of 2020.
“Younger buyers have a positive association with home ownership. They see the value in it and they’ve done the math. Currently, a monthly mortgage payment can equate to little more than renting,” said Adil Dinani, sales representative at Royal LePage West Real Estate Services in Greater Vancouver.
What does this mean for the spring market
Going by the present trends, Soper is anticipating a healthy housing price growth in 2021 across the Canadian market.
There is a “clear imbalance” as of now, owing to the rising demands for buying a home among younger Canadians and the reluctance of the older population towards selling, Soper noted.
The ongoing housing supply shortage is likely to continue well into spring or at least until “more vaccination is underway, and older people are comfortable getting back into the market,” he said.
This will put a “very significant upward pressure on prices,” he added.
“We can expect a 10-20 per cent increase in the price of detached homes overall,” Soper said, adding, “There could also be rising demands for recreational housing, investment in cottage country properties as we move further into summer months.”