Toronto’s high housing costs are causing hundreds of Millennials to leave the city in search of more affordable prospects. But, according to one economist, even more are flooding in to take their place.
“There’s no evidence to suggest that high housing costs are gutting the ranks of Millennials in Canada’s most expensive cities,” RBC senior economist Robert Hogue wrote in an analysis released on Thursday. “For every Millennial leaving a major Canadian city for more affordable digs in the same province, there are between seven and 12 millennials moving in from another country or province.”
Hogue writes that Toronto is a “magnet for young, mobile talent,” and adds that fears that high housing costs could cut the ranks of Millennials households have been “greatly exaggerated.”
The population of 20-34 year-olds has grown solidly in the city over the past decade, expanding by 4.1 per cent since 2007. The Millennial share of the population across Vancouver, Toronto and Montreal was 22.1 per cent in 2018, just slightly above the 20.3 per cent share for all Canadians that same year.
Still, it is true that high housing costs are causing some Millennials to leave the city. In fact, the net outflow of Millennials leaving Vancouver, Toronto and Montreal has more than tripled since 2015.
“Most of the people leaving the Greater Toronto Area, for example, are going to cities within a (long) commuting distance — mainly Hamilton-St. Catharines, Oshawa, Kitchener-Waterloo-Guelph and Barrie,” writes Hogue. “The net loss in the GTA’s population (all age categories included) to these cities totalled 31,000 in 2017.”
But the number of young people leaving the downtown core for neighbouring cities is nothing compared to the crowds heading in the opposite direction. In 2018, net immigration to Canada’s largest cities added 76,300 Millennials to Vancouver, Toronto and Montreal.
“If anything, the inflow of millennial immigrants is poised to grow in the coming years,” writes Hogue. “Canada will increase its annual immigration target from 330,000 in 2019 to 350,000 in 2021, and our largest cities will likely get the lion’s share of newcomers.”
One thing that could change? The number of Millennial homeowners. While Hogue is doubtful that the number of young people living in Toronto will decrease in the coming years, he does note that the share of Millennial renters will likely grow along with home prices.
“High housing prices set an impossibly high bar to clear for many Millennials to become homeowners in a big city. Expect a greater proportion of them to rent in the future,” he concludes.