New report finds millennials are still clinging to their home ownership dreams
But due to the housing crunch, the journey to home ownership may be a stuggle, the Ryerson report says
A new report released Tuesday by Ryerson University's Centre for Urban Research and Land Development finds that millennials are not that different from their parents when it comes to their dreams of owning a home.
Based on extensive demographic research and statistical analysis, the report finds millennials in the Greater Toronto and Hamilton Area are on track to follow in their parents' footsteps and become homeowners, but they're going to face steep prices and a potential housing shortage.
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"What we found is their needs and wants seem to be not that much different than generations before, particularly the baby boomers," said Frank Clayton, a senior fellow at the centre and the main author of the report.
"Millennials want and desire low-density housing much more than high-rise apartments, and unless we provide those units, the prices will continue to escalate."
The report finds home ownership rates are the same among millennials as previous generations, suggesting they are likely to continue to want to own their own homes.
The current rate of home ownership among millennials is 40 per cent, and that is expected to grow to 60 per cent by 2026, according to the report.
A total of 500,000 new millennial households will be formed over the next decade, the report says, and of that number, 350,000 are expected to become homeowners.
Like baby boomer, like millennial
The report also states that the differences between millennials and past generations tend to be most pronounced while millennials are in their 20s.
"The conventional wisdom right now seems to be that millennials are excited about being downtown where the action is," Clayton said.
"But these are all things that people in their 20s want to do, and that's where the thrust of the millennials are."
The report, which defines millennials as anyone born between 1981 and 2001, finds the average age of millennials in the region is 26 — at which it's become normal to be in school, living with parents or not making much money.
But as millennials age into their early 30s, the report predicts they will start to catch up on many of the family goals they've been putting off.
"As they age and move up the income ladder, they seem to be getting married, or living common-law...starting to have children," Clayton said.
When it comes to their living situation, millennials tend to aspire to home ownership rather than renting, and they prefer buying "ground-related homes" — single homes, semi-detached homes or townhomes — rather than living in high-rise units.
The report predicts a reversal of the recent trend of millennials moving downtown and living in condos, toward a move to the suburbs.
"The appeal of the City of Toronto to millennials is likely to fade as they age and begin to prioritize affordable housing and space over proximity to work and amenities," reads the report.
Housing shortage anticipated
However, the government of Ontario's growth plan for the region places much more emphasis on building high-rise apartment buildings than it does on low-density housing, according to Clayton, and current construction trends are producing more condos and apartment units than standalone housing.
As a result, millennials can expect to take on heavy debt to help pay for their homes.
Clayton will present the report's findings at an event hosted by the Ontario Real Estate Association, an industry group that funded the report, in Toronto on Tuesday.