Millennial home buyers are facing more competition with smaller budgets: report
Millennials have seen their purchasing power slashed by 16.5 percent since sine 2017
The stress test seems to have slowed down the market slightly among other changes done by the Liberals and financial institutions these past 12 months. Prices have dropped somewhat and we will see it go back up eventually as it always does overtime.
It is however great to see millennials starting to think outside the box by buying outside of the main city and into more affordable markets. Something I have been preaching about now for quite some time. A 1.5-hour drive can get you a house under $250,000. As for what you can afford, I think its important that every millennial looking at buying a home in the next year speak to a mortgage broker to truly understand what they can afford to buy and at what terms before they start shopping around.
Personally, I think that Toronto will continue to remain expensive and out of reach for most millennials regardless of any government or financial intervention, but let’s not let that stop us. There have been so many improvements to transportation that it allows us to more easily commute in. Think of the Go Train expansion in the past few years into Barrie and St Catharines.
Looking at it from the perspective of a cashflow investor this is all good news for us, as ultimately, it means more tenants and future tenants for the rental market. Rents will keep increasing and demand will remain high for rental units. Millennial friends, I suggest that you look into investing in real estate rather than buying your primary residence.
House prices will go up and down, market cycles will happen, banks will make it more and more difficult to borrow, new regulations will be implemented, but those who are dedicated and find a way to own rental properties will come out ahead at the end of the day.
What are your thoughts? I would love to hear in the comments below.