Photo: Michael Yang/Flickr
Vancouverites between the ages of 25 to 31 are getting the least amount of bang for their home-buying buck when compared to Millennials in several other major Canadian housing markets.
According to a new Royal LePage report, the average Canadian peak Millennial couple (born between 1987 to 1993) had a maximum home buying budget of $406,479 on a dual income in Q1 2018. This means a typical price range for this couple would be between $325,000 and $425,000. In Greater Vancouver, a home in this price range had an average living space of 788 square feet — a 12 per cent decline compared to last year’s average of 878 square feet.
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Meantime, in Halifax, peak Millennials could buy homes in the same price range with an average of 1,736 square feet, more than double the size of Greater Vancouver homes.
“There’s a stark contrast naturally between the two main metropolitans that are in Canada, Vancouver and Toronto, versus areas that perhaps don’t attract the same type of capital and the same type of industry,” Vancouver-based realtor Adil Dinani tells BuzzBuzzNews.
As Canadian peak Millennials make an average salary of $38,148, Royal LePage says many are choosing to buy with a partner or ask their family for financial help.
Across Canada, Millennial couples who bought in this price range had on average 1,269 square feet of space with 2.7 bedrooms and 2.7 bathrooms.
Greater Vancouver homes in this price range had an average of 1.5 bedrooms and 1.2 bathrooms, while homes in Halifax offered Millennials an average of 3.1 bedrooms and three bathrooms.
In the Greater Toronto Area (GTA), Millennials didn’t get much more for their money compared to Greater Vancouver, with an average living space of 856 square feet, 1.7 bedrooms and 1.4 bathrooms.
“While $425,000 will largely net an entry-level condo in Greater Vancouver and the Greater Toronto Area, on the east coast, this budget unlocks most of the market, offering prospective millennial purchasers large, detached homes with all of the bells and whistles,” says Phil Soper, Royal LePage president and chief executive officer, in the report.
With the introduction of a new stress test on January 1, Royal LePage says the average Canadian Millennial’s purchasing power dropped by approximately 16.5 per cent ($40,103) during the first quarter of 2018.
According to Dinani, the stricter regulations have weakened Millennials’ purchasing power in Greater Vancouver, making it tougher to compete with other buyers who are also in the entry-level market.
“There’s such a strong level of demand for condos right now and it’s becoming more and more difficult because of the competition level for first-time buyers and Millennials to get into that as investors are now in the mix as well,” says Dinani.
To find more affordable homes in their price range, Dinani says Millennials are opting for properties outside of Vancouver-proper.
“Migration east is very much strong and probably will be the new trend in the coming months and years,” he says.