More of Ontario’s younger generations are likely to buy a home in the next two years.
That’s according to new research from the Ontario Real Estate Association (OREA). One in four (24%) people in Generation Y (born between 1981 and 1995) said they are likely to purchase a home in the next two years (up eight points from last year), while 18% of people in Generation X (born between 1965 and 1980) said the same (a six-point increase from a year ago). These are findings from OREA’sOntario Home Ownership Index, a survey of Ontarians’ perceptions of home ownership and real estate markets at the neighbourhood, city and provincial level.
In terms of their preferred housing type, half of Gen Y respondents said they are likely to purchase a detached house (51%), followed by ‘condo/apartment’ (28%), ‘semi-detached house’ (18%) and ‘row-house/townhouse’ (13%). Similarly, the majority of Gen X respondents selected ‘detached house’ (63%) as the housing type they are most likely to buy. Semi-detached houses were the second most popular choice (26%), followed by ‘condo/apartment’ and ‘row house/townhouse’ (each at 17%).
“Based on their intentions to buy, and the kind of real estate they’re looking at, it is evident that ‘stage-of-life’ is a motivating factor for Gen Y,” says Ray Ferris, president of OREA. “Also, given the strength of real estate markets lately, it is understandable that a growing number of millennials would like to own a (detached) home and why so many believe real estate is a good investment.”
‘Desire to own a home of my own’ (38%) is Gen Y’s main motivator for purchasing a home in the next two years, followed by the ‘desire for a larger home’ (28%). ‘Long-term investment value’ made it in the top three for both Gen Y and X, but for the latter group it was the biggest driver (35% compared to 28% for Gen Y). For Gen X, ‘desire to own a home of my own’ (28%) and ‘change in family situation’ (26%) made it into the list of top three reasons for buying a home.
Furthermore, a larger number of Ontario’s younger generations (X and Y) agree that real estate is a good investment – 81% of Gen X and 77% of Gen Y said it is a good investment, compared to 72% and 70% who said so last year. Moreover, the perception gap is narrowing between generations, as 85% of baby boomers admit to real estate being a good investment.
“This uptick in consumer confidence is likely driven by the very strong gains we’ve seen in home values in the last year,” says Ferris. “For those Gen Ys and Xs who plan to sell, they will surely experience those gains themselves.”
One in four people in Gen Ys (25%) say they are likely to sell their home in the next two years (up 15 points from one year ago), and 15% of Gen X plans to do so (up eight points). In comparison, 12% of baby boomers (up only three points from the previous year) say they are likely to sell their homes within the next two years.
Read the full news release and learn more about the research methods.