In recent years, the national price for a home in Canada has sky rocketed. Previously during the baby boomer generation and generation X, it was normal for young adults to purchase a home. Those who kept their home long enough were usually fortunate to see a large increase in value. However, now, generationY is facing steep home prices causing most to rent. A few might be able to afford a row home or condo, but hardly can afford the price associated with a detached home in a central neighbourhood. However, according to the Ontario Real Estate Association (OREA), generation Y isn’t going to let this price influx get in the way of them purchasing a detached home.
When Fahed Malik, the director of marketing communications for OREA, was asked why generation Y is still hoping for a detached home despite today’s market, Fahed responded “I think what we are seeing in the research, there are a few factors. It’s obviously stage of life, as needs change, your requirement for a home changes. There is a need for a larger home and a detached home can give you that practicality.”
Moreover, generation Y is also driven by the idea that purchasing real estate is a good investment. Unlike, for example, purchasing a new car, whose value detreats significantly as soon as it leaves the lot.
According to Elton Ash, the regional executive of RE/MAX of Western Canada, the increase in home price yet desire to still own a detached home may result in many millennials moving to the suburbs.
“The desire to have the dog, the garage and 2.4 kids is strong no matter what generation you are talking about. I just did a road trip in Manitoba and visited a community 35 kilometres north of Winnipeg and the lot cost was $45,000. But it’s the same result as you move out of city cores, prices to get cheaper and that’s why bedroom communities are getting more popular” says Ash.
At this point in time, most baby boomers are still working and aren’t planning on retiring anytime soon. Hopefully when they do and eventually decide to downsize, it will make the dream of having a detached home a more attainable goal for generation Y.