Recently, The Globe and Mail published an article titled, “Think Gen Y will prop up Canada’s housing market? Think Again”. This article claims that, because Gen Y is less likely to be financially able to purchase real estate, the market is sure to correct itself and/or crash.
According to the article,
“The number of people aged 20 to 29 who are living with their parents hit 42.3 per cent in the 2011 census, up from 27 per cent in 1981. The unemployment rate for young adults was double the national rate at 13.9 per cent in January, and there’s a serious problem of underemployment.”
This is a classic case of myopic journalism and, in this case, entitlement thinking. Just because purchasing real estate for those under 30 in Toronto is becoming more challenging does not mean bad tidings for the market in general. We are not a closed community. We are an international city with an immigration flow that is growing our population, stimulating our economy and, a portion of which, is purchasing real estate upon arrival.
According to StatsCan,
“The 2011 survey counted about 2.5 million immigrants in the Toronto region, accounting for 46 per cent of the region’s population. Of all immigrants in Ontario, seven out of 10 lived in Greater Toronto.
And the region remained a magnet for recent immigrants with 381,700 newcomers settling in Toronto — 32.8 per cent of all those who arrived in Canada between 2006 and 2011.”
Toronto is growing at an annual rate of 38,000 people and is now the fourth largest city in North America. We have a significantly low vacancy rate (1.6% in December of 2013) and this makes us a darling for any Real Estate Investment Trusts and individual investors that favour a portfolio of real estate holdings over a volatile commodities market. When was the last time you saw a rental apartment building being developed? These are not short term purchases either, we are a favourite city for long term landlords.
And we are not making any more land. Thus, those who want a house find that demand is always higher than supply. That does not mean the end of home ownership. It just means that your entry into the market may require a condo alternative for the first step.
I want the best for my son, I hope that he will enjoy home ownership and that he will be able to create an equity nest egg for himself. I wish the best for everyone, may we all and our children be able to create some equity wealth that would be a financial safety net for each of us. This is why I find articles like this Globe and Mail article to be irresponsible and dangerous. They blind the potential real estate buyer for the sake of another “if it bleeds it leads” grab for greater circulation.
For more than a decade there have been doom and gloom articles and their unfortunate achievement is the growing number of buyers that are stuck renting because the market has passed them by. Real Estate has always appreciated in the long term. To heed these articles is to doom yourself to paying off someone else’s equity nest egg.
An experience Realtor will show you how the market has and is fairing. They will help you to get your start so that there can be a time in the future when you are in your house or condo enjoying the lifestyle you once hoped for and now have and they will do this with your best interests in mind. We call ourselves Real Estate Professionals for a reason.