Canada’s best-performing real estate markets have seen prices balloon to near-uncontrollable levels in the past few years, and while sellers and brokers are enjoying generous windfalls, the next cohort of potential buyers is actually fleeing from home ownership altogether.
In an interview with BNN
, Purpose Investments CEO Som Seif said that the cost of getting new homes is keeping the majority of millennials from purchasing in the overheated Toronto and Vancouver markets.
“For young people today, it is a daunting issue they face,” Seif said. “I think it really starts to tilt towards the renting equation.”
The market observer added that the younger generation doesn’t feel that the prices attached to these properties are commensurate to their actual value.
“We’re talking about average home prices, but the quality of product available in the half-million-dollar to million-dollar range—which is expensive for starter homes—is very weak,” Seif explained.
According to the executive, the trend points to the possibility of more and more condo units as starter homes, especially since these are far more affordable with a price point in the $150,000 to $350,000 range.
“It’s going to come down to ‘where’s the right place?’ and ‘[am I] buying in the right locations?’” Seif stated. “I think location is going to matter more than anything else if you’re buying a condo today.”
He advised would-be buyers to temper their expectations, however.
“What you’re buying for that is very, very small compared to 10 years ago.”