Millennial Migration Due To Red Hot Market
The numbers are in: Canadian home prices have been growing by 2.0% per month on average, and 10.9% year-over year. The red-hot Toronto market saw a 3.1% increase in home prices, and Vancouver had a 2.3% increase despite the new foreign home buyer tax.
Canada’s booming real estate segment and competitive bank lending is contributing to approximately 20% of the economy. “Real estate has become the country’s biggest industry at 12.4 percent of GDP, or 13.2 percent if you include leasing,” the Bloomberg report stated.
The down-side of the climbing house prices despite it’s positive effect on the GDP is this: first time home-buyers and millennials in particular are being priced out of the market. The average cost of homes neared $1.1-million in the greater Vancouver area and shot above $700,000 in Toronto. Even once affordable surrounding regions such as Scarborough, Ont., are now expensive.
The result? Millennials looking to buy are getting squeezed out of the big cities. According to Statscan, Toronto has lost the highest number of young people since 1999 and Vancouver has lost the most since the Great Recession.
Are you feeling the squeeze? Matrix Mortgage Global has lending solutions for millennials and first-time home buyers in this situation, such as purchasing an investment property and renting out part of it to increase affordability.