Home prices pushing gen-Y to buy
Poll indicates soaring costs prompting now-or-never attitude
The unstoppable rise in GTA home prices is persuading more 20-to-40-something buyers now is the time to jump in for fear they if they don’t they’ll be locked out of the market for good.
An Ipsos poll released Wednesday by the Ontario Real Estate Association (OREA) finds that one-quarter of gen-Y residents, those born between 1981 and 1995 say they are likely to purchase property in the next two years, an eight-point jump from a year ago.
About 18 per cent of gen-Xers, those born between 1965 and 1980, said the same thing, a six-point bump from last year.
In June, the average price of a GTA home hit $747,000, a 17-per-cent yearover-year leap, according to the Toronto Real Estate Board.
Experts say those price increases fuelled by low interest rates, are spurring the home hunt rather than deterring it.
The survey showed “desire to own a home of my own” was a key reason for gen-Ys, cited by nearly 40 per cent of respondents, said Ray Ferris, president of OREA “For gen-Xers, the biggest driver was “long-term investment value.”
For Michael Charendoff, 31, the blistering market is no deterrent to his goal of buying a detached home, ideally outside the city.
“If you’re in a responsible position and you’re able to enter the market, go for it,” he said, citing the adage of “time in the market, not timing the market.”
Charendoff, who works in environmental services for a GTA municipality, said his dream is to build an energy-efficient house out of green building materials from scratch.
“Ownership of a house outside Toronto will allow for the control that I need to achieve that,” said Charendoff.
He attributes his stable financial situation in part to having lived with his parents for years, and now with his grandmother near Avenue Rd. and Hwy. 401.
Slightly more than half of gen-Y respondents said they are likely to buy a detached house.
That’s followed by more than one-quarter aiming for a “condo/apartment,” fewer than 20 per cent with their sights set on a semi-detached house, and a small minority gunning for a row-house or townhouse.
Gen-Xers crave detached domiciles in even higher numbers.
Nearly two-thirds say they plan to buy one.
Semi-detached houses came in second at one-quarter, followed by condos and row houses.
Tarik Gidamy, a founding director of the online brokerage TheRedPin which caters largely to younger buyers, says “the panic is starting to set in, with mortgage rates at all-time lows.
“It’s the mentality of, ‘Either I buy now or I’m going to miss my chance in Toronto or even the outskirts like Barrie, Hamilton,’” Gidamy said.
He noted the greater appeal of condos to younger buyers may be the staged payment for pre-construction purchases.
“Not many people, coming out of school or two or three years into a new job, have amassed $200,000 or $300,000 in equity for a house,” he said.
Property flipping may also be on the minds of more than a few young home prospectors.
The Ontario Real Estate Association survey reveals one in four gen-Y homeowners say they are likely to sell their place by mid-2018 to take advantage of the scorching Torontoarea market.
Only about one in 10 baby boomers say they plan to sell in that time.
The Ontario Real Estate Association represents more roughly 64,000 brokers and salespeople from 40 real estate boards across the province.
The online Ipsos survey of 1,006 residents was conducted between May 31 and June 2.
The results are considered accurate within 3.5 per cent 19 times out of 20.