Downtown lifestyle still attainable for millennials, says TransUnion

Millennials struggling to get a foot in the door of a home they own may want to look at TransUnion’s latest data

By Neil Sharma

15 Jun. 2018

Millennials struggling to get a foot in the door of a home they own may want to look at TransUnion’s latest data.

The credit bureau compiled data from the fourth quarter of 2017 on mortgage originations, and while it found a 19.5% decline among millennials, a glimmer of hope emerged in Canada’s second-largest city.

“We are seeing balances grow 4.4% in Montreal, and it was one of the markets where we saw balances grow the most,” said said Matt Fabian, director of research and industry analysis at TransUnion Canada. “It’s going to be one of those emerging markets where, historically, housing prices have been a little undervalued but it’s not necessarily the same situation as Toronto or Vancouver where there’s going to be a massive spike. It’s levelling out to more realistic values.”

According to the data, mortgage balances through the end of last year were actually higher in Winnipeg, Toronto and Vancouver, however, it’s a foregone conclusion that millennials will struggle attaining homeownership in the latter two cities.

“One of the things to keep in mind about the housing market in Canada is the story for a long time has been Toronto and Vancouver, the GTA and GVA,” said Fabian. “Housing markets outside those markets have been stable. They’re going to be of interest for them because millennials want to be closer to the core of those cities, but they might need to make trade-off choices and look farther outside. The other option is renting. It will be interesting to see how attitudes for millennials shift, in terms of homeownership, and we’re seeing early signs of that.”

George Macris of DLC Centre-Ouest in Montreal says that the city is still affordable, but economic rejuvenation has allowed the city’s millennials to buy into the market with relative ease. Moreover, the tech sector is thriving and those jobs are typically millennial-driven.

“In Montreal there’s opportunity for homeownership,” said Macris. “In Toronto they cannot buy anything close to the downtown area, but here they have well-paying jobs where they can easily make around $80,000.”

However, it isn’t so affordable that they can skip a few steps on the housing ladder and purchase single-family homes off the bat. However, the downtown core isn’t beyond their means like it is in Canada’s other two largest cities.

“We still have a few years to go until millennials will be unable to buy a detached home,” said Macris, “because markets are still lower in Montreal and millennials have the income to qualify, but as properties go up in the next few years, they might be less able to purchase.”