Quote:
Originally Posted by Wolf13
Well, the market is no longer about whether or not somebody can afford to own.
One can easily own a swanky place for that money, but one can also rent a swanky place for that money. Growing urban centres and young/median age professionals seem to like to not fully commit to a mortgage.
This has been the growing trend for a while
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Yeah, I'm going to have to jump in and say that this is incorrect.
This study done by TD back in April of this year found that 81% of young people (millenials) said they hope to one day own their own home.
I think the idea that young people don't care for home ownership and would much rather rent a "cool urban condo" instead of mortgaging a boring suburban McMansion because they want to be mobile in the labour market and "don't like commitment" is completely misguided.
Rather, I think we've just seen young people in almost all major urban markets in Canada struggle to find an affordable house in comparison to boomers experiences 30 or 40 years ago. Heck, even here locally Winnipeg experienced massive housing price increases in the mid 2000's. In Winnipeg, in 1990 the average house sold for around $80k and in 2018, the average house was selling for around $300k - that's a 283% increase in average selling price over roughly 30 years. Are you going to tell me nominal wages have also tripled in 30 years? Hardly not. I understand that interest rates have dropped significantly which have accelerated housing prices, but that still doesn't change the debt to income ratio.
The result is that single-detached homes are out of reach for many young people across all major markets in Canada, and as a result, they choose to live with what they can afford which means usually renting or purchasing cheaper condos in dense urban markets.
If given the choice between paying $2000 a month in rent on a 700 sq.ft. 1 bedroom condo or apartment in downtown Toronto versus $2000 a month in mortgage and property tax payments on a single-detached 4 bedroom home with a yard in Etobicoke, I bet 80% of the time a "young person" would choose the home. The problem is that instead of a $2000 mortgage payment, millenials in pricey markets face a trade off of $2000 in rent or $5000 in mortgage payments, with the later option not even being an option for most people.
So no, it's not that the vast majority of young professionals don't like the commitment of a mortgage, it's that young professionals can't afford a mortgage plain and simple.