‘Peak millennial,’ condo nation, and other Toronto real estate trends to watch in 2018
– via CBCNews
While avocado toast emojis may be “peak millennial” for some, the term has a different meaning in the real estate world.
It refers to the largest cohort of millennials, born between 1987 and 1993.
The sub-generation is now reaching its theoretical home-buying age and will be closely watched by realtors in 2018.
Real estate broker Royal LePage President and CEO Phil Soper believes peak millennial will be a major player in the Toronto real estate market in 2018.
“They’re finally fleeing the nest,” Soper said in an interview with CBC Toronto.
Soper expects strong demand for real estate to continue in 2018, thanks in part to this large demographic hitting the age when many want to buy a home.
“What this means is that we’ll have a new group of buyers,” he said.
Other factors will drive 2018 demand, according to the Royal LePage House Price Survey, which was published last week.
The report predicts that international immigration will continue to bring home-buyers into Canadian markets.
And in the cases of Ontario and British Columbia, their strong economies and job markets will continue to attract newcomers from other provinces, the report said.
According to a 2017 Royal LePage survey on the topic, 87 per cent of millennials intend to buy a home at some point in their lives.
“It appears kids desire real estate to the same degree as their parents,” Soper said.
Of course, reality can get in the way of intentions, but Soper says even in an expensive real estate market like Toronto’s first-time buyers will be able to buy a home.
Industry watchers predict demand and prices for condominiums in Toronto will continue to rise in 2018.
The average sale price of condo in the City of Toronto last month was $532,700, up 14.1% from December 2016, according to the Toronto Real Estate Board.
“The condo in Toronto has become the starter home,” Toronto realtor Desmond Brown said in an interview. “Lots of people still want in the market, and this is their entry point.”
While it’s expected that millennials and other first-time buyers will drive the Toronto condo market, they may be joined by their parents.
“Without hesitation, we can say Canada is now a condo nation, like other advanced economies around the world,” last week’s Royal LePage House Price Survey said.
As peak millennials finally “flee the nest,” their baby-boomer parents are looking to downsize, Soper says.
But he says they won’t be going after the same units.
In Toronto, the price range of most millennials will keep them focused on small, one-bedroom, even studio or “micro-units”, Soper says.
Retiring Baby Boomers, on the other hand, with savings and home equity, will be looking for larger and more expensive condos.
Impact of regulations
New borrowing rules that came into effect on Jan. 1 may temper some market growth, realtors say.
On top of this, interest rates are expected climb.
Still, Soper doesn’t see the market slowing drastically.
“I think we’ve got more demand than these new regulations can slow down,” he said.
But Enzo Ceniti, a director with the real estate software firm The Red Pin, is expecting the borrowing situation to keep some buyers out of the market
“At least for the first few months,” he said in an interview.
And for those who are still hunting, the effect of the mortgage rules, last year’s foreign buyer tax, and more inventory, is helping.
Realtors are seeing fewer bidding wars for properties and listings remaining on the market longer.
“Right now, it’s still not easy, but a little easier to be a buyer,” Centini said.
By: Trevor Dunn