While prices of houses in major Canadian cities soar, many millennials have been finding it increasingly difficult to find affordable housing.
While prices of houses in major Canadian cities soar, many millennials have been finding it increasingly difficult to find affordable housing.Real estate prices have risen even in outskirts of cities and areas where they have remained traditionally lower thus making it very difficult for potential buyers to purchase their much needed house.
Average house prices are around $1.1 million in the greater Vancouver area and have risen up to $700,00 in Toronto. Places surrounding the cities are facing steep increases too and areas like Scarborough, Ontario are now expensive for a potential home owner.
Millennials are looking for alternatives, some are sharing their house with house guests or renting out rooms to students to make up for the large prices they have to pay.
The average price of a house has doubled in the Greater Toronto Area over the past 7 years, according to the Canadian Real Estate Association. In Vancouver too prices have doubled, according to CREA.
While the real estate prices have steadily increased, the people paying for the houses have not received a proportionate increase in income. An average person’s income has only increased 15 percent over the past 7 years, in comparison to housing prices which have doubled. This makes it very difficult for older people to enter the housing market as first time owners.
While renting out rooms and hosting paying-house-guests are some alternatives that millennial are opting for, many of them are bidding farewell to the big cities and heading to other parts. Millennials find it much more lucrative to find new jobs or work from home options rather than shelling out big dollars for un-affordable housing.
Statscan’s latest intra-provincial migration data gives us a glimpse into this, Toronto has lost the highest number of young people since 1999-2000 and Vancouver has lost the most since the Great Recession. The data shows that millennials are moving to areas outside Toronto and Vancouver, such as Oshawa and Barrie in Ontario and Kelowna in British Columbia.
However the trend has led to a spike in prices in these areas as well, it has become much more expensive but still remain lower than the cities making it significantly easier on millennials.
Regions surrounding Toronto face the same issue, In Barrie, the price of an average house has almost doubled to $403,019 over the past six years, according to CREA. In Hamilton, prices have jumped 55 per cent to $483,281.
Taking out mortgages has become easier in spite of these rising real estate prices as low interest rates have made it easier on loan seekers. More first time home buyers are now millennials than earlier. An Environics Research Group study Data show that the majority of first time home buyers in Canada are now millennials compared with five years ago, when they accounted for less than half of the new purchasers.