High home prices in British Columbia have left the majority of ‘peak millennials’ – defined as those between 25 and 30 years old – feeling as though they are out in the cold in terms of the housing market, with most reporting that a lack of affordability means they will probably not be able to buy a home in the next five years.
Most respondents in this age group – 86% – said they believed owning a home is a good investment, but 83% said it is unaffordable, according to a Royal LePage report released August 17. The same percentage said not only are they currently unable to buy into the market, but they will likely not be able to do so in the next five years.
The problem is considerably worse in Vancouver. The study found that nationwide, most peak millennials say they are willing to spend up to $350,000 on their first homes. While across B.C. as a whole, this would allow them to buy a 2.5 bedroom, 1.5 bathroom bungalow, in Greater Vancouver, this would only be enough to buy a 2 bedroom, 1.5 bedroom condo, most likely not located in the City of Vancouver itself, but rather in a surrounding suburb.
“As home prices continue to rise in what is Canada’s most expensive housing market, affordability within Greater Vancouver continues to be a matter of contention, particularly among the millennial cohort who are most often first-time buyers,” said Adil Dinani, a real estate adviser with Royal LePage West Real Estate Services in Vancouver.
“As a result, we are seeing extremely strong demand in the condominium and townhouse segments, as younger purchasers look to the last remaining touch points in the Greater Vancouver market.”
Phil Soper, president and CEO of Royal LePage, said high prices in the city have led to millennials looking elsewhere in the province.
“In British Columbia, a home in Langley, Kelowna or Victoria is approximately half the price of a home in Vancouver,” Soper said.
Soper said peak millennials are facing issues their baby-boomer parents never had to deal with. He also pointed out that across Canada, prices are more affordable in areas where job markets are more uncertain.
“While finding employment in our largest urban markets, Toronto and Vancouver, is relatively easy compared with other areas of Canada, buyers face limited inventory and high home values in these regions.”
@EmmaHampelBIV
