Despite sky-high property prices, millennials still driven to own homes: survey

Despite the high propertyprices in the GTA, the majority of millennialsaged 25 to 30 have a strong desire to own a home and are hoping to purchase onewithin the next five years, according to a new survey released Thursday by Royal LePage.

In Ontario, 72 per cent of the respondents said they believed the homes in their region are not affordable. However,nearly three-quarters of those surveyedacross the country see home ownership as a good investment.

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The survey, conducted byLegerMarketing, focuses on the buying patterns of "peakmillennials," a demographic aged 25-30 that holds a lot of purchasing power in the near future.

Strength in numbers

"Whether they choose to buy or rent, peakmillennialswill inevitably shape the housing market due to their sheer volume," said PhilSoper, president and CEO ofRoyalLePageina newsrelease.

While the high prices are discouraging, many people between 25 and 30are motivated to own a property because they're realizing that if they don't get into the market right now they might be priced out over time, says Tom Storey, 26, a sales representative with Royal LePage.

"They could wait and save up for their perfect home but they might not be moving at the same rate that the market is moving," Storeysaid. "If they get in, it'll help them move up the property ladder."

That was what pushedCameron Goldberg, 26, to make a move and buy a property at King and Bathurstacouple of months ago.

"If the market keeps going up I don't want to be in a place where I would want to buy but couldn't afford to buy in Toronto because the market might have exceeded my ability to save," he said.

Goldberg, who was already renting in the area, said he thought about "how I would feel about it in five years, not how I feel about it today."

Condos versusdetached homes

While 59 per cent of those surveyed said they would like to buy a detached home, only 30 per cent believe they'll actually be able to afford it.

According to the survey, 86 per cent of people aged 25-30 still view real estate as a good investment and 66 per cent are willing to buy in thesuburbs that are more affordable.

"They don't want to commit to the city right now but they still want to own a property so they're renting it out at the same time and have it growand appreciateso they know they're in the market," Storeysaid.

In 2012, detached homes were the most common type of property millennials were buying with abudget of $350,000 across the country, with the exception of the Greater Vancouver Area where they were primarily buyingcondos.

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This remains the case in2017, the survey says, with the added exception of the GTA, where condos have also become the most common type of property sold to the 25-30 demographic within that price range.

That's not surprising to Storey, who says he often tells clients about his own experience of getting into themarket.

"I got into the condo market and that helped me buy my next property. It helped me move up the ladder."

Storey says the 25-to-30demographic isgravitating towards a more urban lifestyle andbeing close to work and transit in downtown Toronto, adding thatcondo living "will eventually become the norm."

For Goldberg, who lives a six minute walk away from his office, investing in a space downtown made sense.

"I believe that the downtown core is an area that will always have demand. There's so much happening in this area," he says. "If you look at this city, it is expanding and becoming one of the biggest tech sectors in North America."

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Storeysaysmanypeople in their mid-to-late 20s are thinking seriously about their careers and starting a family, so these first-timebuyers are driven to own a property.

"A lot of people in that age range are now also seeing their parent maybe cash out and seeing how much money they've made over that period of time so they're thinking, 'Oh I've got to get in,' because my parents' retirement is almost paid for by their house," he said.