Condo prices in Canada's two most expensive housing markets have climbed rapidly over the past year, making it harder for millennials to complete their first purchase.
The average price of Greater Vancouver condos sold in July reached a record $664,944, up 15.9 per cent from a year earlier. In the Greater Toronto Area (GTA), the average price of condos sold last month hit $501,750, up 23.2 per cent from July, 2016, although down 7.3 per cent from the peak of $541,392 in April.
Millennials – people born between the early 1980s and early 2000s – are struggling to save for adequate down payments to enter the housing market in Canada, especially in the Vancouver and Toronto regions. Real estate firm Royal LePage focused on a subset dubbed "peak millennials," who now range in age from 25 to 30.
"Facing challenges their baby-boomer parents never encountered, peak millennials are confronted with significant obstacles that vary depending on where they live," Royal LePage chief executive officer Phil Soper said in statement.
In a survey of 1,000 peak millennials across Canada, 64 per cent of the respondents said they believe properties in their respective regions are unaffordable. The survey's respondents in British Columbia had the most pessimistic view of their ability to purchase, with 83 per cent of those canvassed in B.C. saying their area is unaffordable – the highest rate in the country.
Leger conducted the online survey in June for Royal LePage, citing a margin of error of plus or minus three percentage points, 19 times out of 20.
Fifty-three per cent of the respondents nationally said they are willing to spend up to $350,000 for their home purchase. Thirty-five per cent of those surveyed said they already own a home while 50 per cent stated that they rent. Most of remaining 15 per cent said they live with their parents or family members.
"The pent-up demand for housing from millennials is enormous, with only a third of this large demographic currently owning a property and an overwhelming majority desiring to be homeowners," Mr. Soper said.
In the GTA, $350,000 would be enough to acquire a "starter" condo with 910 square feet of living space, compared with the same budget in Fredericton landing a four-bedroom detached house with 2,568 square feet in the New Brunswick capital, according to Royal LePage.
Nationally, 61 per cent of the peak millennials surveyed said they are willing to move to another city or suburb to find more affordable housing.