The dream of homeownership is strong among millennials
Nicole and Matt have two small children. Matt is a welder and Nicole works in a salon. Two years ago, while Nicole was pregnant with their second child, they decided it was time to start looking for a home.
They searched REALTOR.ca for their perfect starter home.They needed a few bedrooms, some space for the kids to play in the yard and, ideally, a garage for Matts welding side jobs. They called a REALTOR, spoke with a mortgage broker and made a decision.
Home ownership was not affordable for them at that time. They moved into Nicoles parents house. Not how you expected that story to end, is it?
Unfortunately, this is the reality that many millennials (born between 1981 and 1996) face in Canada today. In research released in October of 2018, conducted by Abacus Data on behalf of the Canadian Real Estate Association (CREA), housing ranked as the top priority for Canadian millennials.
In fact, 86 per cent of Canadian millennials who are not homeowners want to own a home someday and 68 per cent of those are passionate about it.
So whats stopping them? In the survey, millennials stated that saving enough for a down payment, the cost of carrying a home with monthly mortgage payments and mortgage interest rates were the top three factors that impacted their ability to enter the housing market. Saving a down payment was listed by 47 per cent of millennials as the top issue that affects their ability to buy a home.
Researchers also asked millennials what impact recent housing policy changes had on their decisions to enter the housing market. The results were shocking, with more than 60 per cent feeling that interest rate increases and government decisions that make it more difficult for people to get a mortgage have had a negative impact on housing affordability.
There is a clear desire from Canadian millennials to achieve the dream of homeownership. Most millennials want to own a home and will be looking to our elected leaders for progressive policies to make those homes affordable.
Recently, proposals from the Nova Scotia Association of REALTORS (NSAR), in conjunction with the Canadian Real Estate Association (CREA), have been implemented by the federal government to improve affordability. In March of 2019, the Home Buyers Plan (HBP) was increased to allow first-time buyers to borrow up to $35,000 from their RRSP towards a down payment.
But more can be done to provide meaningful assistance and allow more Canadians to enter the housing market. In the 2019 election, millennial voters will make up the largest portion of the electorate at 37 per cent. With such a large portion of voters identifying as millennials, housing affordability is expected to become a prominent election issue.
That idea sits well with Nicole and Matt, who are still living in her parents basement apartment looking forward to purchasing their first home sometime very soon.
- Contributed by NSAR
NSAR is the professional association for more than 1,500 REALTORS in Nova Scotia.
Bank of Canada maintains overnight rate target at 1 ¾ percent
The Bank of Canada today maintained its target for the overnight rate at 1 percent. The Bank Rate is correspondingly 2 percent and the deposit rate is 1 percent.
The global economy is showing signs of stabilization, and some recent trade developments have been positive. However, there remains a high degree of uncertainty and geopolitical tensions have re-emerged, with tragic consequences. The Canadian economy has been resilient but indicators since the October Monetary Policy Report(MPR) have been mixed.
Data for Canada indicate that growth in the near term will be weaker, and the output gap wider, than the Bank projected in October. The Bank now estimates growth of 0.3 percent in the fourth quarter of 2019 and 1.3 percent in the first quarter of 2020. Exports fell in late 2019, and business investment appears to have weakened after a strong third quarter. Job creation has slowed and indicators of consumer confidence and spending have been unexpectedly soft. In contrast, residential investment was robust through most of 2019, moderating to a still-solid pace in the fourth quarter.
LISTINGS FALL AGAIN TO END 2019, PUSHING PRICES HIGHER
Canadian Real Estate Association data show that national-level home sales fell 0.9% (sa m/m) in December 2019 after rising in the previous nine months. Limited availability looks to be increasingly weighing on sales activity. The month saw another broad-based decline in new listings18 of the 31 centres for which we have data witnessed fallsthat lifted the national sales-to-new listings ratio to 66.9%. It was the highest ratio since 2004 and a third straight month of supply- demand conditions tilted in favour of sellers (after data revisions). Fourteen cities reported sellers market conditions; the rest were balanced. The aggregate MLS Home Price Index (HPI) rose 3.4% (nsa y/y), its best gain since March 2018.
Montreal remained Canadas tightest local market, with rising sales and falling listings leading to yet another record-high sales-to-new listings ratio and the citys steepest y/y MLS HPI gains since 2005. Ottawas ratio also reached a new high as new listings plunged by more than 20% (sa m/m), driving a record 12.5% (nsa y/y) MLS HPI increase. Toronto also crept into sellers market territory for the first time since March 2017as in Montreal, home purchases rose and new listings felland its 7.3% (nsa y/y) HPI rise was the sharpest since 2017.
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Source: Scotiabank Economics