Written by Jim Adair
A flurry of recent media reports claim that millennials are leaving Vancouver in droves, due to rising real estate prices and rental rates. That’s just not true, says the British Columbia Real Estate Association’s chief economist, Cameron Muir. He says population estimates show the number of 20 to 34-year-olds has increased during the last decade, and “home ownership rates for the millennial age group were significantly higher during the most recent census than in recent decades.”
Using population estimates from the B.C. government, Muir says in the City of Vancouver, from 2005 to 2015 the number of millennials grew by more than 15,800, or over 9.5 per cent, to 181,000.
“Even a local credit union produced a report speculating that millennials are disengaging from the Vancouver economy, largely the result of high housing costs,” says Muir in a report. “This viewpoint is surprising, especially when you consider millennials are such an abundant demographic cohort in large vibrant cities across North America and that so many of them seek out the kind of urban lifestyle that Vancouver has to offer.”
He says, “Millennials are being attracted to the City of Vancouver and the region, not retreating from it.”
The Canadian population continues to be dominated by the baby boom generation. Canada Mortgage and Housing Corp. (CMHC) recently updated its long-term housing growth projections (http://www.cmhc-schl.gc.ca/odpub/pdf/68532.pdf?lang=en), which show that more than one-third of households will be seniors by 2036.
CMHC calls the children of baby boomers the “echo generation” — those who were aged 23 to 43 in 2015. In terms of household formation, “the echo generation will continue to be the main source of both homeowners and renters,” until 2021, says CMHC.
“It’s a myth that millennials don’t want to own their own home,” says Barry Gollom, vice president, mortgages and lending, CIBC. A poll conducted for the bank “suggests that millennials place as much importance on being a home owner as Canadians in other age groups,” says Gollom. “Home ownership is an important milestone to many, and that hasn’t changed even though it has become increasingly difficult to get into the market.”
The poll found that 85 per cent of respondents said home ownership is important, including 86 per cent of those aged 18-34, of whom 42 per cent were renters, 36 per cent were owners and the rest lived at home with their parents.
Damon Knights, director of home financing with BMO Bank of Montreal says, “As with many other areas of their lives, our millennial customers face unique realities in the housing market compared to past generations. Prospective home buyers should certainly not enter the market until it is personally right for them, but as they sit on the sidelines, they need to be mindful that the market is not waiting for them. If home ownership is an eventual goal, it is crucial to speak to a mortgage specialist and set up a saving strategy that responds to the ever changing, and likely rising, rate of home prices.”
CMHC says that one-person households will be the most common type of households by 2036.
“One person households and couples without children will replace couples with children as the most common types of households,” says the report. “Growth in couples without children and one-person households is to some extent a product of aging — children growing up and moving out of their parents’ homes, and partners dying and leaving widows/widowers behind, respectively.”
The fastest-growing household group will be those aged 75 plus. “Among senior-led households, more than half of the household maintainers will be aged 75 or older in 2036,” says the report. “This will mean increased demand for services to facilitate seniors staying in their own homes.”
The report says about 70 per cent of Canadian households will own their homes in 2036. It says the numbers of both owners and renters will increase, but the average annual growth for owner households will be about five times that of renter households.
More than half of households will live in single-detached dwellings, but the percentage of apartment dwellings will continue to grow.