Royal LePage Survey: Nearly half of Canadians aged 25 to 35 own
their home; one quarter of these homeowners have purchased a property
since the onset of the COVID-19 pandemic
52% say remote work has increased likelihood of moving further from employer
Highlights:
TORONTO, February 25, 2021 –According to a recent Royal LePage demographic survey[1],
nearly half (48%) of Canadians aged 25 to 35 currently own their home,
and 25 per cent of these homeowners purchased a property during the
pandemic. Among non-homeowners, there is a strong intention to purchase
in the future (84%), with 68 per cent planning to make the move in the
next five years. Sixteen per cent say they plan to purchase a property
within the year, while 14 per cent say they will buy within one to two
years, and 39 per cent are looking to purchase in two to five years.
“The
pandemic provided an unexpected prize for young Canadians — a path to
home ownership,” said Phil Soper, president and CEO, Royal LePage.
“Mortgage rates fell to historically low levels and the competition for
entry-level housing lessened. Many investors sought to divest of
property as traditional renter groups such as foreign students, new
immigrants and short-term renters disappeared behind closed borders.”
Soper
noted that much higher than typical demand from this cohort, combined
with older homeowners who have been generally more reluctant to put
their property on the market during the pandemic, has contributed to a
near-crisis shortage of listings in parts of the country.
“Measures
necessary to prevent the spread of COVID-19 have motivated many of our
younger Canadians to buy, while the health crisis dissuaded many of our
older homeowners from selling,” continued Soper. “Some young people
living with parents or roommates found their work-from-home environment
uncomfortably crowded. Others saw a once-in-a-decade affordability
window open on their dream of home ownership. On the other hand, many
older homeowners whose homes are adequate for changed employment
circumstances have delayed their desire for a housing upgrade until the
medical crisis is under control.”
Confidence in Canadian real
estate is strong and despite economic challenges related to the
pandemic, Canadians aged 25 to 35 have a healthy personal financial
outlook. Ninety-two per cent of those surveyed agree that owning a home
is a good financial investment. Seventy-two per cent are confident in
their short-term financial outlook and 78 per cent are confident in
their long-term financial future. Many (40%) have even seen their
savings grow since the onset of the pandemic, and 11 per cent saw a
significant increase.
“In many ways, the pandemic has sucked the
joy out of our normally kinetic young adults’ lives. No dining out, no
concerts with friends or winter escapes to the sunny south. Even retail
therapy has lost its luster when no one will see those new shoes on the
next Zoom call. The silver lining is in soaring savings; unspent money
that is finding its way into real estate investments,” said Soper.
Nearly
two thirds of Canadians in this age group (63%), who are employed or
seeking employment, say the ability to work for an employer that allows
the option of remote work is important, a fact that is not surprising
given the volume of sales in regions outside of the major urban centres
since the onset of the pandemic. Fifty-two per cent said the
availability of remote work has increased their likelihood to move
further from their current or future place of work. Overall, 39 per cent
of this age group are considering a move from their current home to a
less dense area as a result of the pandemic, while 46 per cent said the
pandemic had no impact on their desire to move to a less dense area.
When
given the choice, 45 per cent of those aged 25 to 35 said they’d prefer
to live in a city. Similarly, 47 per cent said they would choose small
town or country living. The top responses for the most attractive
feature of living in a city are walkability (21%) and access to events,
attractions and other entertainment options (21%), followed by diversity
of people and cultures (18%), and more employment opportunities (17%).
The top reasons for wanting to move to a less dense area are access to
more outdoor space (62%) and lower home prices (61%), followed by the
affordability of larger properties (51%).
Experts across the
country noted young buyers felt comfortable with the safety measures in
place around the home buying process during the pandemic.
“Younger
buyers are exceedingly comfortable with online research, be it for the
latest personal tech, a pair of running shoes, or a home,” said Soper.
“This group has had no problem adapting to our enhanced use of virtual
tours and electronic contracts. We expect the pandemic will have
permanently accelerated the acceptance among our clients of using many
of our emerging home buying and selling technologies.”
Royal LePage 2021 Demographic Survey (full national, regional and city-level results): rlp.ca/table_2021demographicsurvey
Regional Insights
Ontario
In
Ontario, 44 per cent of residents aged 25 to 35 own their home. Of
those homeowners, 26 per cent purchased a home since mid-March of last
year. Among those who do not currently own a home, 68 per cent say they
intend to buy within the next five years.
Ontarians in this cohort
largely believe that home ownership is a good investment (92%), and
nearly half of those surveyed (41%) say their savings have increased
since last March. Record low mortgage rates and the option to work from
virtually anywhere continue to draw young buyers to markets across the
province.
In the Greater Toronto Area, 46 per cent of respondents say the pandemic has increased their desire to move to a less densely populated area.
“The
pandemic has put a lot of things into perspective, especially for
first-time home buyers,” said Tom Storey, real estate agent at Royal
LePage Signature Realty in Toronto. “Most of my 25- to 35-year-old
clients have fit into one of three distinct buying scenarios over the
last year: the softer condo market and low interest rates allowed
renters to become owners; move-up buyers who had purchased a condominium
a few years ago were able to turn that equity into a down payment on a
larger property in the suburbs; or they’ve left the city altogether for a
significantly larger space in more affordable places like Hamilton,
Guelph, or even cottage country.”
Storey added that this cohort is
not expecting to find their dream home straight out the gate. They are
interested in taking advantage of some extra savings and low borrowing
costs, to invest in a property that has appreciation potential.
While remaining an affordable alternative to Toronto and Vancouver, Ottawa
has seen its housing market appreciate over the last few years, due in
part to increased demand from both local and out-of-town buyers, many in
the age range of 25 to 35.
“Homes near Ottawa’s downtown have now
become unattainable for some in this age group and many buyers look in
the various suburbs outside the city centre, which are only a short
drive away,” said Justin Millette, sales representative at Royal LePage
Team Realty. “Since the start of the pandemic, my clients’ priorities
have shifted from location to space and affordability, and the lack of
inventory is piling on added pressure to try and get into the market as
soon as possible. There is a sense they may be priced out of certain
areas if they don’t act quickly.”
Millette added that since last
March, he’s seen an increase in younger buyers seeking larger
properties, as well as current homeowners looking to upsize. Millette
expects to see a shift back to the city once the pandemic is over,
especially among this group.
Seventy-one per cent and 75 per cent
of those surveyed in Ontario feel confident in their short-term and
long-term personal financial outlook, respectively. Forty-three per cent
say their desire to move to a less dense area has increased since the
onset of the pandemic, and 56 per cent say the option of remote work has
increased their likelihood of moving further away from their employer.
Royal LePage 2021 Demographic Survey (full national, regional and city-level results): rlp.ca/table_2021demographicsurvey
Quebec
In
Quebec, demand from buyers aged 25 to 35 has flooded the suburban real
estate market over the past year, spurred by low interest rates, the
ability to work remotely and the desire to invest in long-term quality
of life.
According to the survey, 50 per cent of this cohort in
Quebec own their home, compared to 48 per cent in Canada. Of those young
Quebec homeowners, 18 per cent purchased a home since mid-March of last
year, while 28 per cent of homeowners located in Montreal have
purchased a home since the onset of the pandemic, the highest rate among
the cities surveyed.
When asked about their intention to buy a
property, 17 per cent of Quebec respondents who do not own a property in
this cohort said they plan to buy this year, compared to 19 per cent of
those living in Montreal. The proportion reaches 69 and 68 per cent
respectively, among Quebec and Montreal respondents who do not currently
own a home and have the intention to buy within the next five years.
According
to Roxanne Jodoin, residential real estate broker, Royal LePage
Privilège in Saint-Bruno-de-Montarville, millennials currently are the
critical mass of buyers in the Greater Montreal Area.
“Low
interest rates and the ability to work from home are the main drivers
for young buyers today. Many are also returning to their roots,” said
Jodoin. “Some left their childhood homes in the suburbs to go to
University in the city but the current economic situation is driving
them back home where they can enjoy more square footage, a yard and a
space they can call their own. Becoming a homeowner is increasingly
important to this generation and it is clear that many of them are
taking steps to make that happen.”
The survey results confirm this
trend, with 93 per cent of Quebec respondents saying that buying a
property is a good financial investment, the second highest region in
the country behind the Prairies.
“The real estate market is still
very competitive. The clients I assist in buying a property are
resilient and persistent. I am impressed by their determination, their
financial capacity and desire to invest,” added Jodoin.
According
to the survey, Quebecers aged 25 to 35 are the most confident in the
country when asked about their financial future. Seventy-eight per cent
and 86 per cent of those surveyed in the province say they feel
confident in their short-term and long-term personal financial outlook,
respectively.
“Multiple-offer situations and bids over the asking
price can make the buying process overwhelming. I encourage young buyers
to make balanced decisions and make offers on properties that will keep
a good value over the years,” concluded Jodoin.
Royal LePage 2021 Demographic Survey (full national, regional and city-level results): rlp.ca/table_2021demographicsurvey
British Columbia
In
British Columbia, 49 per cent of residents aged 25 to 35 own their
home. Of those homeowners, 27 per cent purchased a home since mid-March
of last year. Among those who do not currently own a home, 65 per cent
say they intend to buy within the next five years.
Strong demand
from buyers aged 25 to 35 continues to drive sales in Western Canada. As
is the case from coast to coast, many young Canadians in British
Columbia (41%) have seen their savings grow since the onset of the
pandemic, which has been an important factor in their decision to
purchase a home during this time, along with historically low interest
rates.
“Low interest rates are oxygen for the market,” said Adil
Dinani, sales representative at Royal LePage West Real Estate Services
in Greater Vancouver. “Younger buyers have a positive association with
home ownership. They see the value in it and they’ve done the math.
Currently, a monthly mortgage payment can equate to little more than
renting.”
Ninety-one percent of those surveyed in the province
believe that home ownership is a good investment. Dinani noted that
clients in this age group are thinking more long-term, and low interest
rates have made it possible for them to purchase a larger starter home.
“Over
the last year, I’ve noticed a shift in priorities where first-time
buyers are increasingly valuing size and outdoor space over location,”
said Dinani.
Seventy-one per cent and 72 per cent of those
surveyed in B.C. feel confident in their short-term and long-term
personal financial outlook, respectively. Dinani expects activity among
this cohort to remain high this spring and throughout the coming year.
Royal LePage 2021 Demographic Survey (full national, regional and city-level results): rlp.ca/table_2021demographicsurvey
Alberta
At
56 per cent, Alberta boasts Canada’s highest home ownership rate among
those aged 25 to 35. Of those homeowners, 24 per cent purchased a home
since mid-March of last year. Among those who do not currently own a
home, 71 per cent say they intend to buy within the next five years.
While
Alberta’s housing market has remained steady and balanced in recent
years, the COVID-19 pandemic has spurred activity among younger buyers,
especially in its urban centres. Thirty-seven per cent of Albertans aged
25 to 35 say they’ve seen their savings grow since the onset of the
pandemic.
“With a boost in savings from not spending over the past
year, many first-time buyers have been able to accelerate their plans
by one or two years,” said Doug Cabral, real estate agent at Royal
LePage Benchmark. “With the affordability of homes and low interest
rates, combined with an increase in down payment, this group has been
able to use this time to their advantage.”
Lifestyle, community,
ample living and outdoor space, as well as potential resale value are
all important factors in the decision-making process for young buyers.
Cabral noted a recent increase in activity from out-of-province buyers,
namely from B.C. and Ontario.
“Someone from Vancouver or Toronto
has real buying power in a city like Calgary, where they can get a lot
more space for their money,” said Cabral. “Square footage and improved
lifestyle are top priorities for clients across the board.”
Sixty-six
per cent and 79 per cent of those surveyed in Alberta feel confident in
their short-term and long-term personal financial outlook,
respectively. Cabral expects to see a strong spring market, and
anticipates that homeowners in the upper end of the market may be
looking to leverage equity in their homes to put towards an investment
or recreational property.
Royal LePage 2021 Demographic Survey (full national, regional and city-level results): rlp.ca/table_2021demographicsurvey
Saskatchewan and Manitoba
In
the Prairie provinces, 53 per cent of residents aged 25 to 35 own their
home. Of those homeowners, 32 per cent purchased a home since mid-March
of last year. Among those who do not currently own a home, 65 per cent
say they intend to buy within the next five years.
“Most of my
clients are first-time buyers in the 25 to 35 age range, currently
living at home with family,” said Daniella Payne, sales representative
at Royal LePage Prime Real Estate in Winnipeg. “While they know they
will likely not win the first home they bid on, they are very motivated
and are looking to take advantage of low interest rates and increased
savings. They believe working from home, at least in part, is a
long-term inevitability and want to ensure they have ample space to work
and live comfortably.”
Many young buyers in the area are
expanding their searches to include neighbourhoods on the outskirts of
major cities, where there is more inventory and more space. Forty-one
per cent of the cohort say that the COVID-19 pandemic has increased
their desire to move to a less dense area. Payne advises new homebuyers
to be prepared to act quickly in order to be successful.
“Buyers
should discuss their budget and location preferences, and get their
financing in order before they begin their search. If they find their
dream home, the window to make an offer can be short on well-priced
properties in popular neighbourhoods,” said Payne.
Thirty-six per
cent of Canadians aged 25 to 35 in the Prairies have seen their savings
increase since mid-March 2020. Seventy-three per cent and 80 per cent of
those surveyed in Saskatchewan and Manitoba feel confident in their
short-term and long-term personal financial outlook, respectively. Payne
expects another year of strong activity from the cohort, especially if
interest rates remain low.
Royal LePage 2021 Demographic Survey (full national, regional and city-level results): rlp.ca/table_2021demographicsurvey
Atlantic Canada
In
Atlantic Canada, 48 per cent of residents aged 25 to 35 own their home.
Of this group, 42 per cent have purchased a home since mid-March of
last year, the highest of all regions surveyed. Of those who do not
currently own a home, 75 per cent say they intend to buy within the next
five years.
The ability to work remotely and not be tied to a
long commute has made young buyers in the Maritimes think about what
they really want in a home. Forty-six per cent of those surveyed, who
are employed or seeking employment, say the option of remote work has
increased their likelihood to move further away from their place of
work. Like so many 2020 buyers, they have prioritized the practical use
of space and lifestyle over location.
“Within one month of the
start of the pandemic, buyers in this age group came out in droves,”
said Will Campbell, sales representative at Royal LePage Atlantic in
Halifax. “This market is challenging due to a lack of supply. However,
young buyers are determined to make a purchase, even if they have to be
flexible on location.”
Forty per cent of respondents in Atlantic
Canada said their savings have increased since the onset of the
pandemic, which is in line with the national average. Seventy-four per
cent and 82 per cent of those surveyed in Atlantic Canada feel confident
in their short-term and long-term personal financial outlook,
respectively.
Campbell noted that first-time buyers are worried
they will get priced out of the market if they don’t get in now and take
advantage of low interest rates. He expects a brisk spring market with
some inventory relief, but likely not enough to satisfy the increasing
demand of this cohort.
Royal LePage 2021 Demographic Survey (full national, regional and city-level results): rlp.ca/table_2021demographicsurvey
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About Royal LePage
Serving
Canadians since 1913, Royal LePage is the country’s leading provider of
services to real estate brokerages, with a network of over 18,000 real
estate professionals in over 600 locations nationwide. Royal LePage is
the only Canadian real estate company to have its own charitable
foundation, the Royal LePage Shelter Foundation, dedicated to supporting
women’s and children’s shelters and educational programs aimed at
ending domestic violence. Royal LePage is a Bridgemarq Real Estate
Services Inc. company, a TSX-listed corporation trading under the symbol
TSX:BRE. For more information, please visit www.royallepage.ca.
About Leger
An online survey of 2000 Canadians
aged 25-35 was completed between December 29, 2020 to January 8, 2021,
using Leger’s online panel.
No margin of error can be associated
with a non-probability sample (i.e. a web panel in this case). For
comparative purposes, though, a probability sample of 2000 respondents
would have a margin of error of ±2.2%, 19 times out of 20.
For further information, please contact:
Katie Raskina
Proof Strategies
kraskina@getproof.com
(416) 969-2709
