First-Time Millenial Home Buyers Expect To Spend Average $350,000

A new study released by BMO Bank of Montreal has found that on average, Millennials expect to spend $350,000 on a home, and the majority of them anticipate receiving $35,000 for a down payment from their families.

As of March 2016, the average price Millennials expect to pay for their first home in Ontario is $415,110 with a down payment of 15.97%.

Other highlights include:

64 per cent of those currently renting are working on saving for a down payment.

20 per cent plan on buying with someone else, like a friend or relative, to make the purchase more affordable.

25 per cent are waiting for housing prices to drop.

51 per cent are hoping to purchase a detached home, 29 per cent a condominium, 27 per cent a townhouse, and 20 per cent a semi-detached home.

“In the 1980s and 1990s, older homes on large suburban lots were affordable options for younger buyers,” said Robert Kavcic, the senior economist for BMO Capital Markets. “Now, those properties have become relatively scarce and attract premium prices, leaving condos and townhouses as the new ‘affordable’ options.”

Sameh Elrefaei, the managing director of personal lending products for BMO Bank of Montreal, said that, “Our report revealed that Millennials certainly recognize the value of purchasing a home as a much better investment than renting, but they also appreciate that the home-buying process is heavily shaped by affordability. Setting a realistic expectation for financial help, creating a detailed savings plan and building both a before- and after-purchase budget can help determine what is truly affordable.”

Affordability Of Homes In Canada Increases Slightly In Third Quarter Of 2014: RBC

According to the latest Housing Trends and Affordability Report released by RBC Economics Research, homeownership across Canada became slightly more affordable in the third quarter of 2014.

“Owning a home was a bit easier in Q3 thanks to rising household incomes, low and steady interest rates and cheaper utility costs in many parts of the country – Toronto even saw some relief,” said the senior vice president and chief economist for RBC, Craig Wright, in RBC’s report. “With home resales hitting close to the highest levels since early 2010, the overall tone of Canada’s housing market is quite solid at this stage.”

The number of resales across Canada increased during October for the eighth time in nine months, which is mostly due to demand surpassing supply in markets like Toronto, Calgary and Vancouver.

“A combination of gradually increasing interest rates and higher prices will likely reverse the improvement in housing affordability that took place in the past year and weigh more and more heavily on homebuyer demand in Canada,” Wright continued. “We expect the next stage of the housing cycle to be a transition toward lower resales and slower price increases.”

Affordability fell by 0.2 points to 47.8 per cent for two-storey homes on a national level, and by 0.3 points to 27.1 per cent for condos.

“A trend that jumped out in the latest data was a further broad improvement in affordability of condos where a strong majority of markets across Canada saw the measure for the segment fall,” he said. “Condos no doubt continue to be the more affordable ownership option in every market.”

Canadian Millennials Want To Buy Real Estate

According to a new poll commissioned by the Huffington Post Canada has found that the majority of millennials want to buy a home, but are concerned about affordability.

According to the poll. 73 per cent of those who were surveyed and currently live at home or rent want to purchase a home or condo before they reach the age of 31, while 85 per cent feel that it is very important to own a home someday. The older those surveyed, the more the importance of owning a home diminished.

The poll was conducted by Abacus Data. According to Abacus Data CEO David Coletto, “Owning out own home is very important to most millennials in Canada. But higher student debt levels, sky-high housing prices and changes to mortgage rules, make that dream much harder to achieve. What happens when Baby Boomers want to sell their homes to downsize and no one is there to buy them because few have the down payment or mortgage available to buy them?”

Those who were surveyed were between the ages of 18 to 30, with those aged 21 to 23 the most optimistic about buying a home one day. Just more than half of those surveyed (54 per cent) want to live in a comfortable and spacious home, while 46 per cent of those surveyed want to live within walking distance of services. Only a small percentage (24 per cent) of those surveyed want to live in the country, while 42 per cent want to live in a suburb close to a city and 34 per cent want to live downtown in a city.

Check out the poll in full here.

RBC: Toronto – Full Steam Ahead

The powerful rebound in the Greater Toronto Area market carries on with a full head of steam. Very strong demand continues to dominate, lifting sales of existing homes to all-time highs in recent months, yet keen buyer interest haslargely failed to attract more sellers, resulting in a dearth of homes available for sale. The properties that are put on the market, however, move fast, frequentlybeing the object of bidding wars. This has contributed to prices in the area generally reaching record-high levels.

The flipside of steeper prices is an attendant erosion of affordability. All RBC measures rose for the second-straight time in the fourth quarter of 2009 – up 0.1 percentage point for bungalows and townhouses, 0.2 percentage points for condominiums and 0.3 percentage points for two-storey homes. Affordability levels have now moved above long-term averages in the area – significantly so in the case of two-storey homes – confirmingthat stress is starting to build in the Toronto market.

Source:  RBC Housing Trends & Affordability – March 2010