While you keep hearing about Toronto’s cold winter housing slump, its Millennial space heater, so to speak, needs some attention too.
This winter saw sales volumes down across most markets. Toronto particularly felt the chill, with sales 35 per cent lower this February compared to last year. Compared to last year, home prices are 12 per cent lower, with single-family houses continuing to drop. Condos, on the other hand, are posting rising gains consistently this winter.
Millennials, however, helped somewhat to heat things up.
Millennials are a catalyst for this surge in the condo purchases, driven by their increasing intention to buy. Accustomed to living at home or renting, they’re looking to jump into the market before being priced out. Their interest comes from increased job security and confidence in the economy.
With this increased confidence, they’re now more likely to enter the market. Half of Millennials polled indicated they would be very or somewhat likely to buy in the coming years.
They’re the most prominent part of the larger picture, with one-third of all Canadians looking to buy a home in the next two years. This is the highest overall purchase intention since 2010.
But this burst in purchase intention should not be taken as a warning sign of an overheated market.
Toronto realtor Tom Storey tells Financial Post to expect a healthier level of demand in housing types this year, “but not a boom like we saw last year, it’s more expensive to get into the market, interest rates are higher and the government interventions are still in place.”
But despite this desire to buy, Millennials still need to come up with the cash, and it’s their parents who are at the perfect point to lend a hand. So the Bank of Family comes in handy.
More and more Millennial parents are at the point that they’re looking to downsize, and selling a larger home allows them to secure part of, if not all, a down-payment to help out.