Real Estate Influencer Alert: What Young Canadians Want
Like every industry, real estate also has new trends every now and then. These trends can be a growing demand for environmentally friendly and energy-efficient building practices, increased use of automation devices, amenities and luxury innovations.
Regulatory changes, Government policies and mortgages are also factors that influence changes. And, as a new generation of homebuyers emerges, their preferences and needs are redefining the very idea of real estate investing.
What do these young Canadian homebuyers need? From innovative financing plans to spaces adapted to their lifestyles, we’ll look at the shifts in real estate in Canada.
Table of Content
Alternative Homeownership Models
Real estate in Canada is at a high, with the average home setting you back by $699,117 last month. In June 2024, a detached house in Toronto cost an average of $1,758,649, while in the GTA, you could get one at about $1,388,144.
Limited spending incomes, housing affordability, and a low inventory mean Canadian homebuyers are exploring alternative paths to homeownership. Traditional single-family home ownership is a far-off dream for many potential first-time home buyers.
And so, it is no longer the only viable homeownership option, and many buyers are opting for more creative and collaborative solutions.
Co-Ownership: Sharing the Dream of a Home
One of the most trending buying methods in real estate is co-ownership, in which individuals or families pool funds to purchase a property together.
This young-adult-friendly model allows buyers to combine their finances with their parents, family, or others, making homeownership a more accessible reality. In fact, in some cases, strangers have come together to buy a detached home in Mississauga, which offers a unique opportunity to share property ownership.
Rent-to-Own: One Month at a Time
Another homeownership model gaining popularity is the rent-to-own model.
In this arrangement, buyers have the option to lease a property with the clearly defined goal of purchasing it. Often, a portion of their rental payments is applied toward the down payment.
This method is a convenient stepping stone for buyers who lack immediate means for a traditional mortgage, allowing them to build equity and gradually transition into full home ownership.
Income Suites and Multi-Generational Living
The demand for flexible living arrangements for different generations has given rise to income suites.
An Income suite is a secondary unit within your home that has a private entrance, bathroom, kitchen, and sleeping area. Sometimes called an in-law suite, income suites are primarily built to create extra rental income.
Young Canadians prefer properties with secondary suites or in-law units primarily because the rental income can offset mortgage costs or accommodate extended family members. This trend not only addresses affordability but also reflects the preferences of modern multi-generational Canadian households.
Growing Eco-Consciousness
Concerns about the environment and sustainability are key factors for many millennial homebuyers. They like properties that align with their eco-consciousness, prioritizing sustainability and energy efficiency.
Efficient Green Homes
Continuing the same theme, savvy homebuyers look for energy-efficient features, including solar panels, smart home technology, and environmentally friendly materials.
This change in homebuyers’ behaviour is based on growing awareness of the long-term cost savings and environmental impact of sustainable living. In turn, developers are incorporating green design elements into their projects, catering to the eco-friendly generation of Vancouver homebuyers.
Urban Density and Walkability
With a nod to health and convenience, young Canadians are drawn to urban communities, which promote walkability and easy public transportation access.
This trend is also driven by a desire to be more environmentally conscious. As a result, there is a surge in the demand for condominiums, townhomes, and mixed-use developments that offer convenient access to amenities, reducing the need for personal vehicles.
Lifestyle Needs and Preferences
In addition to trends in homeownership models and sustainability concerns, the housing market is also witnessing a change in living spaces.
Flexible Living Spaces
Millennials and younger homebuyers prefer flexible living spaces. The rise of remote work and the need for dedicated home office areas have become significant considerations in their home-buying, especially when browsing for condos in Brampton.
The availability of properties with adaptable floor plans allows homeowners to integrate work and personal spaces seamlessly.
Amenity-Rich Communities
Young Canadians are also attracted to communities that offer an array of amenities, from on-site fitness centers and recreational facilities to shared co-working spaces and social hubs.
This emphasis on lifestyle-focused living is the result of a strong desire for a well-rounded and convenient living experience, where work, leisure, and community can coexist.
Urban Convenience in the Suburbs
While the appeal of urban living remains strong, particularly among young professionals, there has also been a noticeable shift towards life in the suburbs. The Kitchener-Waterloo-Cambridge region is a prime example of this trend, among many others.
Remote work and more spacious homes have seen buyers move to the suburbs. Suburban communities are also evolving to cater to the needs of young homebuyers, offering a balance of affordability, amenities, and access to urban centers.
The Role of Technology in Homebuying
Digital conveniences have changed our lives, and the real estate industry has not lagged.
Proptech (property technology) companies are the norm nowadays, as they offer innovative homebuying and homeownership experiences. From AI-powered home valuations to blockchain-based real estate transactions, these technological advancements have empowered Canadians to digitally navigate the real estate landscape with greater efficiency and confidence.
Simplifying the Search Process
Online real estate platforms such as savemax.com and virtual property tours have become indispensable tools for tech-savvy homebuyers. They allow them to efficiently search for and explore properties from the comfort of their own homes.
This digital-first approach has not only made the search process easier but also expanded the range of potential buyers, enabling them to consider properties beyond their immediate local markets.
In addition to the search process, young Canadians are also leveraging technology to navigate homeownership. From online mortgage calculators to digital closing and document management platforms, these new-age buyers are considering simplified solutions that help them make informed decisions.
The Influence of Macroeconomic Factors
While the preferences of Canadian homebuyers are shaping the real estate market, macroeconomic factors also need to be considered.
Interest Rates and Affordability
One of the most significant macroeconomic factors impacting the real estate market is the fluctuation of interest rates.
As the Bank of Canada continues to adjust its monetary policies to address inflationary pressures, the cost of borrowing will affect the affordability and accessibility of homeownership. Adapting to these interest rate changes will be a critical consideration for property buyers.
Population Growth and Immigration
Canada’s strong record of population growth, fueled by both natural increase and immigration, has been a driving force behind the sustained demand for housing.
As the country continues to attract new residents, the growing need for diverse and affordable housing options for them will become increasingly important.
Government Policies and Interventions
Government policies play a pivotal role in shaping the real estate sector.
Initiatives such as foreign buyer taxes, mortgage stress tests, and policies to boost housing supply have a direct impact on the accessibility and affordability of homes for young Canadians. As the policymakers strive to address the ongoing housing crisis, their decisions will strongly influence the market.
The Road Ahead
As we look ahead, we know that the housing market is set for continued changes. While the path forward may not be entirely predictable, several key trends and scenarios are worth considering.
If interest rates remain relatively stable, population growth is steady, and there is a balance between affordability and supply, the Canadian real estate market may continue to grow, but more slowly. This may give rise to new homeownership models, financing solutions and flexible living arrangements.
The Canadian real estate market will likely see regional variations. Areas with strong job growth and limited housing supply will continue to see price increases, while other regions could experience a more balanced market. Additionally, the development of more suburban communities that cater to young homebuyers could also be a push to the affordability factors.
However, as the real estate industry continues to adapt to these dynamics, it is crucial to monitor evolving trends. It may be a rocky road, but the path leads to exciting possibilities and opportunities.
Whenever you’re ready to buy a property, we are here to help you navigate the market and find the perfect home. Contact us today!
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