How Will Millennials Affect The Toronto Real Estate Market?

Some people hear the term “millennials” and they tune out whatever comes next.  It’s a buzz-word for sure, but I feel as though the older generation doesn’t want to admit that the newer generation is about to take over.

There are 1,500,000 “millennials” living in the GTA, and how and where millennials decide to live over the next 3-5 years might have a bigger impact on the Toronto real estate market than anything else.

Let’s pick up where we left off on Monday, and talk about what millennials seem to want, and more importantly, where they seem to want it…

Millennials

I decided that I would use the very first photo that a Google Image search would produce, given the search query, “millennials.”

I took one look at this photo and rather cynically drew the following conclusions:

1) They’re all extremely good-looking (except maybe the kid at the back left, and the girl second from the back left only shows half her face, but that’s good enough for me!)
2) They’re all dressed as though they didn’t try to look good, and yet they do.
3) They’re all in shape.
4) They’re all stylish (even the kid back right, although ‘only’ wearing jeans and a t-shirt, is wearing designer jeans; although the guy in the guy in the front should really hem his pants)
5) 11 of the 12 of them are white.

It’s an American photo, which might explain why it’s so white, but that’s a topic for another day…

We as a society love to typecast people, name them, and group them.

So it comes as no surprise that after “Baby Boomers,” we named the next generation “Generation X” (really original by the way), and now “Millennials” are upon us.

I think “millennials” and I think about the young adults that were kids at the turn of the millennium.  I was 19, going on 20 – not a kid by historical standards, but perhaps “kids” are those folks in their early 20’s by today’s standards.

I think “millennials” and I think about the folks who don’t really remember what the world was like before the Internet, and never took a book out of a library.  But maybe I’m just way too far ahead?  Maybe I’m off by about a decade?

Perhaps I’m trying to associate myself with Generation-X, and trying to group those born in the late-80’s with the next generation, which has yet to be named.  I call them “The Fingertip Generation,” as they’ve had everything they’ve ever wanted at their fingertips.  They never had to ride their bikes around the neighbourhood to find a friend, since everybody had cell phones, ICQ, MSN Messenger, or text messages.  They’ve never had to go to the mall to look around in various stores for clothing (with their mothers…), since there were photos of everything available on websites.

And so on, and so on…

But already, I’m seeing this play out in the real estate market, and there’s potential here to have a significant impact.

I’ve said this before, but I’ll say it again now: I used to see a pattern whereby kids out of university would rent a 2-bed, 2-bath condo with a friend for a couple years, then find a place to rent on their own, then eventually buy a starter condo around age 26 or 27.

Today, I’m getting calls from kids right out of university, 22-years-old, who have $30K and want to buy a condo downtown, rather than rent.

As I said, that’s the result of this “Fingertip Generation,” and I can only imagine what today’s 14-15 year-olds will want in 7-8 years.

In any event, I’ve been told as I sit here and write this that I really am blending together two generations, so let’s put the future generation on hold for a moment, and come back to the 24-35 year-olds in Toronto in 2016.

Where are these people going to live over the next few years?  And are they going to own the properties in which they reside?

Money is obviously going to impact every single millennial’s search, but I believe that the ultimate decision of where to live, and how much to spend is a cross-section of the following:

1) Money
2) Desire For Space
3) Ability To Commute
4) Family and/or Upbringing
5) Lifestyle

Let me expand on these a bit…

1) Money

How can this not be at the top of the list?

But it’s a trade-off, really.

The more you spend on a home, or the more debt you go into, the less you have to spend in other areas of life.  Max-out on a home, and you’re “house poor” for the next decade or more.  Less travel, less entertainment, and less perks in every area of your lives, and your kids’ lives.

You might be able to afford an $850,000 house in Toronto, but if it’s not what you had in mind – according to “desire for space,” and “lifestyle” on our list above, you might be inclined to look elsewhere.

2) Desire For Space

My wife and I are currently streaming “The Good Wife” in lieu of anything else right now (ideas are welcome!), and in one scene, Alicia’s cheating dog-of-a-husband asks her, “Do you miss the old place?”  He’s surprised when she immediately answers, “No.”  He says, “But this apartment is one-fifth the size of the house.”

Maybe total square footage isn’t everything?

Many of us grew up fantasizing about a big house, with a lush front lawn, a sprawling backyard in which to play sports, a man-cave in the basement, and four bedrooms for our two kids.

If it were on TV, or in the movies, everybody would be able to afford this.  Remember the movie Pleasantville?

In reality, our world’s population has doubled since WWII, and housing and land aren’t as easy to come by as they used to be!

Perhaps our desire for space is shrinking as fast as the very spaces that condo developers are building these days.  Perhaps the ‘average’ Torontonian could make-do with a little less square footage today than those could have two decades prior.

For those that insist on a backyard with a pool, if they don’t have the money in Toronto, then they’re moving out of the city.

For those that value the location above all else, and can make do with a smaller space, the city remains an option.

3) Ability To Commute

Perhaps this should say “desire” to commute, since every one of us could, in theory, commute.

But we all know that if we want more space, and we want to pay the same amount, we have to move further out of the core.  And if we work in the core, well, that means we commute!

It’s not just the commute itself that’s in question.  It’s the lifestyle change that comes with it.

A friend of mine just switched jobs, and started at a new firm near Yonge & Front.  He told me that in his first week, he was amazed at how hard people worked, and how they were all such “go-getters.”  Many of them were in the office at 6:45am!  But after a couple of weeks, and a few lunches, he realized that these go-getters just got to the office early so they could beat the traffic coming south on the DVP, and so they could put in the hours that would enable them to leave at 3pm……..to avoid the traffic going north on the DVP.

It’s a lifestyle, created by the commute.  Some people get up at 5:00am not by choice, but out of necessity.

Buy a house in Toronto, avoid the commute.

Buy a house in the ‘burbs, commute, but get a bigger house.

The cross-section of our list above continues…

4) Family and Upbringing

You might work in downtown Toronto, but if your parents live in Richmond Hill, one of your siblings live in Richmond Hill, and your spouse’s circle of friends live in Richmond Hill, then perhaps buying a home in Richmond Hill and commuting to work isn’t such a bad idea.

I don’t want to sound all “Doctor Phil” here, but family and friends are probably one of the most important two or three things in all our lives.  It’s one thing to see them regularly, but it’s another thing to simply have that feeling that they’re “close.”  It makes it a lot easier to move out of Toronto and into the ‘burbs if you’re being welcomed with open arms.

At the same time, if you’re looking at an area in which you, your spouse, or both of you grew up in, then it’s like “coming home” again.

I had clients living in The Distillery District who wanted to move to neighbouring Leslieville.  We looked throughout 2014 for something affordable (that was then, and prices are even higher now), but one day they just stopped and said, “We were both born and raised in Markham, so why the hell are we so set on living down here?”

They bought a house in “Berczy Village” that was easily three times the size of what they could afford in Leslieville.  She works from home, and he drives south on the DVP to work every day.

5) Lifestyle

While “money” comes first on our list, perhaps “lifestyle” is the ultimate decision-maker.

I also think it’s a cross-section of a cross-section, in that the commute, desire for space, and family, friends, and upbringing all affect one’s lifestyle.

You know your friend who is really into shoes?  She has 60-pairs?  I’m not going to suggest that she buys a house strictly because of her shoes, but you can you see her downsizing to 6-pairs so she can live in a condo downtown?  Or would she rather have a walk-in closet in Ajax, that’s the size of your bedroom, for all her clothing and accessories?

You know your “couple-friends,” who live in the same neighbourhood as all their other couple-friends, and constantly have couple-dinners, and do couple-things?  If push came to shove, would they move 10 KM away?  Or would they find a way to live in a smaller or different space?

Lifestyle can be the deciding factor for many people, but it’s often in tandem with one or two of the other items on our list.

A condo was listed on Monday at 88 Colgate Avenue, for $699,000.

It’s a rare 3-bedroom condo, and it’s located in the heart of Leslieville, across from a parkette, and one block from Jimmie Simpson Park.

This is the kind of compromise, I believe, many millennials will make over the next few years.

It’s not a house, it’s a condo.  But it’s in a neighbourhood where many folks dream of owning a home, and it has all the local amenities that a home would.

Bottom line: if you can’t afford what you want, you’ll either accept less, or move to a place where you can afford what you want.

And that’s the very simple logic that’s going to guide our market moving forward…

56 Comments

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  1. Natrx says:

    It already has. Those semis along the Danforth used to be 550K in 2013. By mid 2014, they were going for 750K. I went to alot of open houses in late 2013 and it was flooded with ‘Hipsters’.

    I personally know several Millennials who got married in 2014 (all around 30) and they all rushed in with fear of never being able to get in if they didn’t plunge in now.

    Me being in my mid 30’s I know many who got in at the ‘last’ cycle. In the mid-2000s when prices were much much lower.

  2. lui says:

    Millennials are living pay check by pay check,I noticed when I was renting out my units in certain areas I got certain buyers.Closer to downtown core got the younger renters,moving to the edge of the city more mature renters.Of course credit checks was used and the younger renters income barely hit $50,000 a year.How the heck can they afford to buy one,drive a nice car,and party at all the hipsters hotspots and save money?.Only way is buying one as a partnership or parents money.

    1. Appraiser says:

      Here’s something more relevant to chew on, other than doomsday websites.

      http://www.fin.gov.on.ca/en/economy/demographics/projections/table4.html

      Where are all those people in the GTA (regardless of age) ‘gonna live?

      1. Mike says:

        If you look at the historical data you will see that the future projections are in line with the growth rate for Toronto for the last 50-years. Sure we can’t sprawl outward like we use to but we can build up (we have an incredibly low density for a city of our size). Growth rate alone hasn’t protected us in previous real estate downturns.

        1. Appraiser says:

          @Mike:

          Sounds like you’re making a prediction of doom here (like so many others over the past 18 years). Oh well, even a broken clock is right twice a day.

          So let’s have it.

          We’ll time-stamp it and take a look next January – shall we?

          P.S. Has anyone looked at the TSX today. Down 6% since Christmas Eve – OUCH!!

          1. Mike says:

            The last crash from 1989 only saw previous prices return in 2000, where are you getting this 18 year run from?

            I’m not making a prediction, I’m just pointing out that indicators (including your note about the TSX) are all pointing negative. Housing prices cannot outstrip inflation for an extended period of time, it’s impossible. But year over year for the last few years it has, at some point it has to correct.

            Currently the two drivers in our inflation rate are energy and real estate; without energy it leaves real estate all alone.

            That said, I’m too smart to make a prediction on where any market it going to head I just like to hear what others are thinking. A difference of opinion, leads to a healthy discussion, which leads to greater understanding. One only has to look at the most use function of a Bloomberg terminal, its the chat rooms.

          2. Kyle says:

            “Housing prices cannot outstrip inflation for an extended period of time, it’s impossible.”

            This statement is utter BS.

          3. Mike says:

            So it’s BS but you can’t provide any proof to refute the claim? Maybe a quote from an interested party or something?

            Since real estate prices make up a large percentage of the CPI, I’d love to hear how it could outpace it for an extended period?

            I mean I’m only using the historical fact that inflation falls within 2-3% as does the historical growth rate of housing prices.

            But please, show me the error of my ways.

          4. Kyle says:

            That’s rich, you make an utter BS Statement without providing any proof yourself (habitual with you) and then when called out you ask for proof. Tell you what here’s my proof,

            1. Toronto real estate has returned 7.3% over the last 45 years, CPI has averaged 4.1% over the same period. So clearly it is not at all impossible

            2. CPI is a basket of generic goods. The real estate component is suppose to represent the “Canadian real estate market” (although there isn’t such a thing), Any idiot looking at today’s market will see Canadian real estate does not equal Toronto real estate.

            3. Real estate is a component of CPI. So CPI basically tracks where real estate prices have been it does not determine where real estate prices will go – DUH. Here’s an anology, a man is standing in the arctic circle, surrounded by endless fresh white snow. Every time he takes a step he leaves a foot print. You can think of the steps as real estate prices and the foot prints as CPI. Based on your statement, you are saying that man can only walk forward for so long, before his footprints make him start walking backwards. Any fool can see the stupidity of such a claim.

            Now please provide your proof that it is impossible, if you can’t then how about admitting you are completely full of it (even though everyone already knows this), and stop posting garbage pulled from your butt:

          5. Kyle says:

            Oh and please don’t try to pull the i was just kidding when i said, “Housing prices cannot outstrip inflation for an extended period of time, it’s impossible.” Cause that would just be pitiful.

          6. Mike says:

            Only used data since 1980 which has seen two up-cycles and one down-cycle but still gets the point across.

            https://www.td.com/document/PDF/economics/special/LongRunRateOfReturnForCanadianHomePrices.pdf

          7. Kyle says:

            We’re talking about Toronto real estate so try using the relevant data set and not cherry picking time periods.
            http://www.trebhome.com/market_news/market_watch/historic_stats/pdf/Historic_1512.pdf

            Also, just because there has been historic correlation between inflation and prices (as there should be – just as there would be correlation between where one has stepped and where their footprint end up), it certainly does not mean that it is impossible for prices to be higher than CPI for extended periods – such a conclusion would be a total miscomprehension (….again) and as i proved above would also be pure BS.

        2. Mike says:

          Back on to comprehension issues I guess.

          First off, you can’t compare a regional number to a national number and and I don’t believe there is anywhere in my posts I defined the data sets as Toronto specific.

          But this is all moot since you agreed with my earlier statement when you said, “Also, just because there has been historic correlation between inflation and prices (as there should be)”

          You have yet to prove that it is impossible.

          But as you said there is a correlation between the CIP and housing prices because they are dependent on one another so it is impossible for one to outstrip the other over an extended period of time.

          1. Kyle says:

            Yes unfortunately it is back to the comprehension thing.

            1. Look at the beginning of the thread, YOU and Appraiser are talking about the GTA real estate market, to which you responded it is impossible for prices to outstrip inflation. Or did you not comprehend yourself when you said, “If you look at the historical data you will see that the future projections are in line with the growth rate for Toronto for the last 50-years.”

            2. I asked you to prove your claim that it was impossible for prices to outstrip CPI, clearly something you can’t do so instead you try to prove that for certain periods there was correlation between data sets. Do you comprehend that proving correlation and proving something is impossible are not the same thing?

            I on the other hand proved that it if one data set tracks and the other data set leads, it is entirely possible for the leading data set to outstrip the tracking data set indefinitely (or do you not understand how footprints work?). And i have provided the data that again proves not only is it possible, it has happened in Toronto for the last 45 years. So bottom line you haven’t proved, “Housing prices cannot outstrip inflation for an extended period of time, it’s impossible.” Time to fess up and admit you were talking out of your ass. Don’t worry it won’t come as a shock to anybody.

          2. Kyle says:

            “But as you said there is a correlation between the CIP and housing prices because they are dependent on one another so it is impossible for one to outstrip the other over an extended period of time.”

            Just to be clear since comprehension is still a work in progress for you, they are NOT dependent on one another. CPI is dependent on house prices ONLY, not the other way around..

          3. Mike says:

            Kyle January 8, 2016
            Yes unfortunately it is back to the comprehension thing.

            1. Look at the beginning of the thread, YOU and Appraiser are talking about the GTA real estate market, to which you responded it is impossible for prices to outstrip inflation. Or did you not comprehend yourself when you said, “If you look at the historical data you will see that the future projections are in line with the growth rate for Toronto for the last 50-years.”

            You will notice that I’m talking about a link from Stats Canada that Appraiser posted when I said that. Then in a later conversation I made my statement about the correlation between inflation and housing prices. I’m sorry, what were you saying about comprehension?

            You can’t compare regional data to national data. Housing prices rise quicker that the rest of Canada but so does the inflationary rate for Torontoians…because they’re correlated.

            2. I asked you to prove your claim that it was impossible for prices to outstrip CPI, clearly something you can’t do so instead you try to prove that for certain periods there was correlation between data sets. Do you comprehend that proving correlation and proving something is impossible are not the same thing?

            I on the other hand proved that it if one data set tracks and the other data set leads, it is entirely possible for the leading data set to outstrip the tracking data set indefinitely (or do you not understand how footprints work?). And i have provided the data that again proves not only is it possible, it has happened in Toronto for the last 45 years. So bottom line you haven’t proved, “Housing prices cannot outstrip inflation for an extended period of time, it’s impossible.” Time to fess up and admit you were talking out of your ass. Don’t worry it won’t come as a shock to anybody

            Actually I’ve shown you that it’s never happened and as such can’t happen because they’re correlated as you yourself pointed out. You were the one that said that it could happen but haven’t produced one shred or proof or any type of reasonable explanation on how it could happen.

            See, I back up my statements. You not so much.

          4. Mike says:

            But as you said there is a correlation between the CIP and housing prices because they are dependent on one another so it is impossible for one to outstrip the other over an extended period of time.”

            Just to be clear since comprehension is still a work in progress for you, they are NOT dependent on one another. CPI is dependent on house prices ONLY, not the other way around..

            Actually they’re both dependent on one another. You think that if the COI were to decrease housing prices wouldn’t follow? Yes, because the last major real estate downturn was caused by what Kyle? That’s right, a recession, negative growth in the CPI. People don’t tend to buy houses in times of low economic growth. That’s a fact.

          5. Kyle says:

            LOL, you’ve backed up your BS with more BS.

            It’s obvious a measurement of where something was does not drive where it will go. This is just a logical fact.

            “it’s never happened and as such can’t happen because” This is just more BS

            Serious question Mike, Did you used to post comments on this blog with the handle “Dave”

          6. Kyle says:

            Again with the comprehension Mike, seriously i think you should pencil off 2017 to continue working on this.

            House prices Dependent on the Economy
            CPI dependent on the Economy
            Does not mean House Prices dependent on CPI

            Like i said time to fess up.

          7. Kyle says:

            The crux of your entire BS argument rests on “it’s never happened and as such can’t happen”. Let’s see how well your “Mike logic” stands up when back-tested at various points in history, shall we:

            – House prices have never been higher than they are now, can they go higher? “it’s never happened and as such can’t happen”, says Mike

            – The BoC benchmark interest rate has never been lower than it is today, can it go lower? “it’s never happened and as such can’t happen”, says Mike

            – Can a black man ever be President of the United States of America? “it’s never happened and as such can’t happen”, says Mike

            – Should i worry that my newly licensed 16 year old son might crash my sports car? “it’s never happened and as such can’t happen”, says Mike

            For the record let me just say your “proof” is clearly yet another stinking, steaming, mountain of rotting BS.

            And by the way, the average y/y Teranet-National Bank HPI (a national measure) change was 6.12% (from 1999, beginning of when data is available), average CPI for the same period is 1.9%.

            Given that your completely unwarranted hubris and desperate need to look smart (even though you aren’t) will not let you ever admit to being wrong, that’s why you’ll shamelessly double down on your BS, long after it was evident it was BS. Might i suggest when you choose a new handle to comment under, please take the effort to come up with something catchier than Dave or Mike.

  3. Paully says:

    Long before the term “Millennials” was coined, they were referred to as the “Echo Boom.” I would expect their long-term behaviour to echo that of their parents.

  4. Mark N says:

    There are two BBC series on Netflix well worth watching: (1) “River” (with Stellen Skaarsgard), and (2) Luther (with Idris Elba).
    Enjoy!

    1. Mike says:

      I liked River but watched Luther right after and man, that was a great show.

      Sherlock is also good but each one is like an hour and a half long.

  5. duncan bray says:

    My son is 34. He has seen 3 couples this past year leave Toronto, after a decade, to move north in order to find neighbourhoods to raise their families similar to the way they were raised (road hockey, local arenas, walk to local schools, safe neighbourhoods (perceived or not) These kids grew up 70 km. north of Toronto but have had to move 100 km. north to afford what they want. The town they grew up in has seen amazing price growth as it is becoming a demand location for the next generation of newer residents of Markham and Richmond Hill. The 3 couples all looked in their home town but couldn’t find what they wanted within their buying budget. Meanwhile, many homeowners nearing retirement age are cashing in and moving further northeast and northwest to small towns within 150 kms. of Toronto. I don’t see this trend slowing anytime soon.

  6. Wut says:

    As a gen-x I will speak for my people and say that condos are horrible unless you live alone. Anyone with a spouse or kids wants space both inside and out that is your own.

    Many millenials are still at the stage of living alone so condos are great for them. Trends are also getting married later and having kids later so I don’t see any problems here.

    I expect another good year in GTA real estate, maybe the last good sellers market, but then again I thought that at this time last year too.

  7. Joel says:

    As the traffic in this city gets worse and worse and there are not that many viable commuting options I can see more people buying condos downtown. I drove from mid-town to Mississauga last night around 5:30 and it took an hour and a half.

    There is no way I would live in the suburbs if this was a daily commute and i think many feel the same way.

    1. AT says:

      Many who live in Mississauga and work in the city take GO train for their daily commute.

    2. AndrewB says:

      As AT suggests, most would take the GO in considering the time, gas and parking costs into the city essentially 5 days a week.

      What David doesn’t capture is that living in Toronto does not necessarily equate to better commute times. Toronto has boroughs. If we were talking old Toronto or along the subway lines then sure, commuting is a breeze. Anyone in Scarborough or Etobicoke will not have a breeze of a commute. Someone travelling by ttc in Scarborough could easily take 1.5 hours into the core if needing to take 2 buses and then a subway in rush hour. A 1.5hr trip would get you from door to door Oakville to Toronto in the Bay St area.

    3. jeff316 says:

      The issue, too, is the two-income family.

      If you have two Toronto-based incomes, living in the burbs becomes a) very expensive, due to the commute and b) difficult to manage, if you have kids in daycare.

      We would have loved to live in Hamilton or Burlington. Commute shommute. But two on the GO, plus TTC, is going to rack up 700 a month alone. Plus, who will pick up our kids from school? What happens if the train is late?

      Lots of practical considerations to give thought to once kids get involved.

  8. Kyle says:

    I think there are certain things that Millenials in Toronto are more inclined to do than previous generations, such as: not owning a car, choosing a condo over a house, choosing to live downtown in a smaller nicer space (even if it is not owned), preferring walkability over size, preferring low maintenance living. I also think Millenials have different targets and benchmarks than previous generations for how they aspire to live for example they view outdoor space as a place to entertain not a place to tend a garden. The “brass ring” for my generation is a large renovated detached house in an established downtown neighbourhood, whereas for Millenials i think most would prefer a penthouse with terrace in King West.

    1. Joe Q. says:

      All true, but once kids come on the scene, that all might change (for the millenials).

      1. Kyle says:

        For my generation, the idea of raising kids in a condo or without a car was a non-starter, but i think for many Millenials there is far more openness to it, in fact for some i think there is even a preference for it. Many Millenials that i know don’t drive, so the suburban option isn’t appealing to them. And the idea of raising kids in a condo isn’t really different than what is done in other large cities,

        I’m very interested to see how it plays out and how the market adapts to this cohort. I’m starting to see some market changes but certainly not a trend in any one direction yet.

        Some of the interesting things i’ve noticed are:

        – Developers are finally starting to offer more larger condo units http://www.thestar.com/business/2014/12/28/the_return_of_the_larger_condo.html

        – Detached houses being torn down to build townhouses or flats (Example: 110 Palmerston, 25 Givins, 170 Markham St)

        Will we see people buy adjoining units and combine them together?

        Anyhow signs point to further Manhattanization of the city core. The long term trend will be fewer and fewer detached homes and more and more multi-family homes.

      2. jimsmith9999 says:

        Kids change the game for sure, and it will be interesting to see how the millennials respond. I don’t see a mass exodus to the burbs, but I also don’t see them all raising a kid in a tiny one bedroom condo. That might put more pressure on the 2-bedroom condo market. It might put even more pressure on the semi-detached market in Toronto.

        A couple of other things that change when you become a parent which will be interesting to see how millennials handle. Thing like proximity to bars & restaurants become less important because you start to use them less and less. It’s still nice to have those handy, but I know all the trappings that drew me to King West when I was single became less an less interesting when I became a dad (when you are getting out once ever week or few being right next to a large option of bars and restaurants becomes less of a draw)

        And things like quality of the school in the neighborhood becomes more and more important. While that may change with shifting demographics downtown, a lot of those schools aren’t overly great right now. That’s actually going to be another interesting development if more and more people raise their kids in the condos – how the school deal with the increase of student. Traditionally when the schools fill up it’s extensions then putting kids on a bus to another area of town.

        1. Kyle says:

          Good points, it will be interesting to watch how the downtown neighbourhoods evolve as the residents mature. I remember about a decade ago, there being far more bars and date-type restaurants on Roncesvalles when i first moved there. Now only family-friendly establishments survive, which then attracts more families to the area. Given how many strollers i now see downtown, i would not be surprised to see new businesses that target families start to move in including private schools.

    2. Mike says:

      Kyle, this assumes that “Millennials” will be in their twenties forever.

      Babyboomers in their twenties wanted nothing to do with capitalism, how did that turn out?

      1. Kyle says:

        @ Mike

        Why is it that every time you respond to one of my comments, i need to correct your inaccurate interpretation of what i have said? No where did i even remotely say that Millenials needs, wants and ideals won’t change. For 2016, try working on your comprehension skills.

        1. Mike says:

          Not sure how I misinterpreted: “I think there are certain things that Millenials in Toronto are more inclined to do than previous generations, such as: not owning a car, choosing a condo over a house, choosing to live downtown in a smaller nicer space (even if it is not owned), preferring walkability over size, preferring low maintenance living. I also think Millenials have different targets and benchmarks than previous generations for how they aspire to live for example they view outdoor space as a place to entertain not a place to tend a garden”

          King West and the lakeshore was built by Gen X’rs wanting to live close to the city and didn’t care about yards, owning a car and choosing a condo vs. a house. Now that the Gen X’rs are in their late 30’s to early 50’s there moving on to houses, yards and cars.

          I mean you could by the same token say that boomers are giving up yards, houses and cars given all the high-end condo developments being built for people looking to downsize.

          You’re point is that Millennials are more drawn to condo living when in fact it’s not a generational thing but a life stage issue.

          1. Kyle says:

            No wrong again…it is not a “stage of life issue”. My point is that people from previous generations would not have been as inclined nor would they have preferred to live in a condo, live without a car or live dead downtown when they were AT THAT SAME STAGE IN LIFE.

            At no point did i say that Millenials will always prefer to live in condos for the rest of their life as if they were “in their twenties forever”.

            12 more months to work on the comprehension.

          2. Mike says:

            Weird, I lived in a Condo downtown, no garden, no car and a ten minute walk to Bay and King. Everyone in my building was born in the mid 60’s to mid 70’s. The Distillery District was a couple blocks east and it was filled with condo’s filled with people born in the same era.

            On the weekends I’d venture out to King West to the bars, like the original Devils Martini on Simcoe before it became a condo 10+ years ago. Sunday mornings we’d often go for breakfast in Liberty Village for brunch, an area filled with condo’s and people in their late twenties early 40’s. Sometimes after work we’d walk down Bay St. to a friend’s condo on the other side of the Gardiner. I never went to Citiplace all that often but I did wake up there a few times.

            Those were heady times but alas they’re past now. Met a woman and we got a place in Riverdale together then sold it and moved to Rosedale. Most of my friends did the same motivated by school districts, parks, square footage and yards. Those with kids have bought cars but a lot still live near subway lines and picked neighbourhoods for the proximity to transit, coffee shops and restaurants.

            I sometimes miss those days, we were young and wild and free, anything but Millennials.

          3. Kyle says:

            I realize you’re still working on comprehension skills, so i’ll also point out that at no point did i say the Millenials were the first generation to live in condos.

          4. Mike says:

            No, at no point did I say that you said that Millennials were the first to live in condo’s. You said that Millennials were “more inclined to do than previous generations”. I was just pointing out that most of the current condo stock was built to feed the need provided by Gen X, literally the previous generation to the Millennials.

            Gen X’rs did it because they were in that life stage, first jobs, single, no family commitments, wanted proximity to places they could hang out, live close to friends and areas high in walkability and public transport. As Gen X’rs got older the started moving out of Condo’s into single family homes to start a new stage in their life.

            Since Millennials are barely 30 they don’t see the need for yards, cars, commutes, being away from friends or the places they hang out and so they seek out the condo’s vacated by the older Gen X’rs who’ve move on.

            Since the average family home in the GTA is over $600,000 and single family residences in Toronto are over a million it’s not inclination that sees Millennials living in condo’s but necessity. They can’t afford to buy a house, most are still in school and the rest are just starting their first jobs, they lack the earning power to participate in any other type of real estate.

          5. Kyle says:

            Inclined: a feeling of wanting to do something : a tendency to do something

            At the time when those Gen X’ers were buying those condos the ratio of condo to home buyers was a lot lower than it is today (i.e. Gen X’ers were less inclined to buy a condo than today’s Millenials).

            In the 2000’s most people who bought condos did so primarily because they were more affordable than houses, especially pre-con. Those that could afford a house from the start, whether they had kids or not bought a house instead. In the 2000’s condo living was viewed as second rate. That’s why pre-con was cheaper than resale as Developers had to induce people to buy condos. Today condo living is viewed as normal. Obviously affordability still plays a big part, but more and more Millenials are electing to live in condos as a lifestyle choice. There are plenty of downtown condos that are owned or are being purchased by Millenials in the +500K range, they have the choice to buy a starter house outside of the core or a bigger home in the suburbs, but are preferring to stay downtown.

          6. Mike says:

            Any facts to back any of that up or are you just relying on exulted wisdom?

          7. Ed says:

            I vote for Mike.

          8. Kyle says:

            It’s summed up very nicely in the article posted by Appraiser above

            “There’s a shifting sensibility around how we define home,” says Toronto developer Mazyar Mortazavi, whose company, Tas DesignBuild, is now focusing on midrise condo projects in neighbourhoods just outside the core.
            “Millennials and the subset before them, the late 30-somethings, are probably the first generation of people who are living their early adult life in urban centres. For them, home has more to do with being part of a complete community than it did in their parents’ generation, when it was about having a backyard, a picket fence and a two-car garage.”

            This jives with what i see every day. I work with a whole bunch of Millenials who have purchased or are purchasing their first condos. Most of them have ample purchasing power to buy a house if they desired, but they don’t. They have no reservations about condo living. And yes some are raising kids in their condo. You seriously think people are paying Peter Freed +$650/sq ft purely out of necessity and not inclination?

          9. Mike says:

            Wait, did you see that? “Millennials and the subset before them, the late 30-somethings, are probably the first generation of people who are living their early adult life in urban centres”

            Hmmm, seems to be a life stage thing (“living their early adult life”)

            Also, the quote is from a developer so there is obviously a bias and then he says “probably”, meaning he doesn’t know.. I mean come on, that’s basic comprehension right there.

          10. Kyle says:

            LOL, puberty is a life stage thing, buying a condo is not. If it were, than it would happen in every generation. Basic comprehension would dictate that he is talking about a change in the behaviour from one generation to the next…not a rite of passage.

            “he says ‘probably’, meaning he doesn’t know”
            Just like when you used of the word “seems”?

  9. Ed says:

    TV program suggestion. The Affair.

  10. Appraiser says:

    It’s official.

    Latest news release – TREB has all-time record year! No doubt millenials played a significant role.

    http://www.trebhome.com/market_news/release_market_updates/news2015/nr_market_watch_1215.htm

    1. Mike says:

      Markets are cyclical, market peaks are defined by new records (hence the term peak), banks are raising mortgage rates, dollar is reaching new lows, 25% of new immigrants are coming into the country with nothing but the clothes on their back, GDP is at 0 and unemployment rates are rising (though slowly). Bullish?

      1. Appraiser says:

        Yeah, I’m way bullish: Here’s some quotes from a recent Toronto Star article on millenials.

        “They have the potential to be the biggest home-buying cohort in history — even bigger than their baby boomer parents.”

        “The first wave — boomers’ kids who range in age from 15 to 34 and make up about one-quarter of Canada’s population — are just moving into their prime home-buying years. Many live in Toronto and Vancouver, where job growth has become a major magnet.”

        http://www.thestar.com/business/real_estate/2016/01/02/millennials-move-up.html

        By the way:

        (1) A one-tenth of a percentage point rise in mortgage rates by one lender (RBC) is inconseqential.

        (2) Our low dollar has zero effect on domestic buyers, in fact it makes Canadian real estate even more attractive to foreign buyers.

        (3) Aside from the fact that you have greatly exaggerated the numbers, there is a huge difference between a refugee and an immigrant.

        1. Mike says:

          First off the Toronto Star is in the business of selling news papers. On the first quote, yes, this will be the largest generation because the population will continue to grow. On the second quote, it would require a price correction to allow this cohort to enter the market. Prices are moving out of range for the first time home buyer. Let’s not forget that the government had to add extra stimulation to allow Gen X to be able to afford their first home (lower down payment, longer amortization) but had to remove those stimulants in an attempt to cool the market.

          As for your point:

          !) Yes, the current rate increase isn’t going to hurt anyone but it does signal that banks see greater risk in the market and as such are looking for a larger spread to accommodate that risk. Since banks require at least 20% down, one has to ask why they think risk has increased. Remember, mortgages compete on price RY is not stupid enough to raise rates if it doesn’t fit the market.

          2) Actually the dollar does have a massive impact on buyers. Where is the food that you eat produced? Where does the furniture you buy come from? Your car, manufactured here in Canada by a Canadian company using only Canadian parts? With a weaker dollar, everything you buy increases and as such life gets more expensive. This means less money for hosing costs. As for foreign buyers, they make up a small percentage of actual sales. They might be more significant in strata than SFH but they’re not making a significant impact on the market

          3) I haven’t exaggerated anything if anything I low balled. The Government has committed to bringing in 25,000 refugees, on average Canada brings in 250,000 immigrants a year, Toronto’s population has grown by approximately 100,000 per year for the last 50 years. All projected growth for the GTA has the population growing by the same amount as prior years. The Federal Government scrapped the immigration shortcuts that allowed wealthy foreigners to gain entry by committing to invest in the country or post an interest free loan. Majority of those who gain entry are young people who don’t have significant assets in which to enter the real estate market.

          1. Wut says:

            Regarding rates, this is just a winter slow down. In a couple months they will be lowering again to get back some market share. If the 5 year stays below .7 or drops more then they will lower even more and especially if the variable is cut again as predicted this year to keep fixed mortgages competitive with variable.

            6 months ago I would have said 5 year fixed was a no brainer, now I’m not so sure. Only oil doubling in price over the next few years will get our variable rates back up, because it sure won’t be from manufacturing, Dalton and Wynne have seen to that.

          2. Appraiser says:

            @ Mike:

            (1) Banks do not require 20% down payment and the minuscule rate rise is a total non-issue.

            (2) The CAD has been in serious decline all year, and yet the Toronto real estate market has had record months almost every month this year. How do you explain that?

            (3) You wrote, “25% of new immigrants are coming into the country with nothing but the clothes on their back…” Say what? If you meant 25,000 refugees that’s one thing; if you meant 25% of 250,000 immigrants that’s another. Either way it’s completely misleading and remarkably inaccurate.

      2. Chroscklh says:

        I suspect the Mike is guy who refuse by condo in 2005, 2007, 2009, 2012, 2013, 2015 – wait for BIG correct. No yet happen. He cite weird stat my friend. I know many immigrant come when I come to Canada and since, with millions cash (like me! buy house cash!). Anecdote? As good as you evidence my friend. Bank raise int rate to improve margin cuz retail be squeeze. Also winter slowdown, as noted. Banks no more scare of risk. I agree though with scare, nervous Mike who rent and no buy, that prices overheat some areas -but dont agree skyfalling like Jame bond house in movie of same name. I think he so pessimist because he scare and cry cuz no buy condo.

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