Canadas young families are giving up on the dream of owning a single-family home, but its not out of a desire to live an urban high-rise life—the cost has simply become too prohibitive.
Thats the key takeaway from a new study carried out by Sothebys International Realty Canada, which found that, if money were no object, 83 per cent of young families would buy a detached home as opposed to any other type of housing. Only 5 per cent prefer condos.
“The popular perception is that people in modern families have typically preferred multi-unit and city centre locations, when in fact what the report shows is if price were no object, they would prefer single family homes,” said Brad Henderson, president and CEO of Sothebys Canada.
The study looked at what it called “modern urban families”—those where the eldest adult is 20 to 45 years old—in Canadas four largest metro areas: Toronto, Montreal, Vancouver and Calgary. It found that, for homebuyers, space is the top priority.
“Families placed the highest priority on achieving value per square foot in their actual home purchased over design, layout and other feature considerations,” the report noted.
It found that 43 per cent of families who own property but not a single-family home have given up on ever buying one. Another 18 per cent plan to buy a detached home in the city centre, while 21 per cent have set their sights on the suburbs.
In Vancouver, North Americas least affordable housing market, fully 55 per cent have given up on owning a single-family home.
So is the dream of owning a detached home dying in Canadas largest cities?
“The price of housing has gone up faster than wages so the dream of detached home ownership is becoming more difficult.”
But Henderson noted there is something on the horizon that could help some younger homebuyers: The inheritances many will receive, in the form of real estate, from their parents.
“There is going to be a fairly significant intergenerational transfer of wealth over next 10 to 15 years and that will help arrest some of this trend,” Henderson said. He expects most people to spend their inheritance on real estate or paying off debt.
Of course, inheritance will only help those whose parents have something to bequeath.
Some economists have raised the alarm about the growing reliance of homebuyers on their parents wealth, arguing it could create a new kind of aristocracy, where only those people whose families already own real estate can afford to step on the property ladder.
Happy with their homes
But while Canadas younger families may be giving up on detached home ownership, theyre not giving up their confidence in the real estate market. Seventy-eight per cent say they expect their real estate to appreciate as fast or faster than other investments.
And while many condo-dwellers would prefer to be in detached homes, they arent necessarily disgruntled about their living situation. Ninety-three per cent said they were “very” or “somewhat” satisfied with their living situation.
The report relied on a survey of 1,743 families in the four metro areas, carried out by the Mustel Group. The survey took place from Aug. 9 to Sept. 6 of this year.