Housing for millennials in Canada is ‘inextricably linked’ to their financial stability, study says

Young professionals priced out of Toronto, Canada are leaving to other cities, an area study shows.

“There’s some indication that in the past two or three years, it has become really popular for young professionals to want to move elsewhere,” said Harvard University research fellow and senior associate at Demographia. Aaron Terrazas, who co-authored the report, added that as home prices have risen, homeowners are less likely to rent to young professionals.

The homeownership rate in Canada is over 90%, and many young people who want to buy their first homes in Canada are finding it impossible to get a loan, Terrazas said. That’s helping push them to other markets.

“When Toronto’s housing market got really overheated in the early ’90s and early 2000s, roughly half of all buyers were first-time buyers under 40,” he said. “Those homeownership rates (for that group) started dropping off. Now it’s fewer than 10%. They’ve gone from being a majority to a minority.”

The study shows Toronto is nearly the most unaffordable Canadian city in terms of young professionals, with Vancouver coming in second and Montreal third.

They make anywhere from $60,000 to $120,000 in the Toronto area, said Demographia. That’s out of reach for a majority of Canadian millennials.

“I’m going to have to pack up my things and move because of affordability,” said one woman who moved out of Toronto.

The study showed that young people have less in the way of savings. To cover unexpected expenses, they were borrowing from family or friends and mostly not making ends meet.

Living in the Toronto area meant lots of commuting, the study said. And for those whose commuting is good, the cost of gas rose 70% in the past decade.

It also involves a lot of debt. Rent and mortgage payments alone were nine times what people living elsewhere were saving, according to the study.

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