Millennials put housing issues high on political agenda
There's a disconnect between what the new generation of home owners want and what's available and affordable.

TheStar.com
June 13, 2017
Tess Kalinowski

The Ontario government's new foreign buyer tax may be popular with the public but housing remains a key political issue among more than a third of voters, especially first-time buyers and millennials.

Research for the Ontario Real Estate Association (OREA) showed 37 per cent of Ontarians strongly believe housing affordability belongs on the upcoming provincial election agenda with 30 per cent saying they would be more likely to vote for a party that takes on the issue.

Nearly 60 per cent of prospective first-time buyers — many who would fall in the millennial age group — strongly agreed they would be more likely to support a political party that promotes housing affordability.

Twenty-eight per cent of millennials identified housing as the fifth most important issue. Only jobs, healthcare, taxes and hydro rates come ahead of housing, according to an Ipsos poll of 2,003 residents, presented at OREA's Ontario Housing Summit in Toronto on Tuesday.

"An affordable place to call home," is one of the most important topics in the province, said OREA CEO Tim Hudak.

He credited the Liberal government's Fair Housing Plan, which includes a 15-per-cent foreign buyers tax, with taking "some steam out of the market."

"The best long-term solution — let's increase housing supply and housing choice. That way we can ensure millennials will be able to get a place of their own," said Hudak, former leader of the Ontario Progressive Conservative party.

The meeting of about 120 government officials and academics devoted an entire panel to the millennials' struggle to afford a downpayment and mortgage.

Called "Generation Screwed?" the panel focused on the disconnect between the kind of houses Toronto-area buyers want to purchase and the choices available to entry-level consumers.

While initially millennials are happy to live in highrises downtown, once they have children and want more space they need to adjust their expectations, said Ben Myers, senior vice-president of Fortress Real Developments.

"That's one of the things that is making people angry," he said. "They've lived in their parental home and their parent bought in a very different market than exists today. A lot of them want that 2,000 sq. ft. single-family home and it's just not available. It's $1 million, $1.5 million and they're kind of stuck. Maybe they don't want to live in the box in the sky."

He suggested that millennials might consider a single-family home their third move rather than their second move out of a condo, stepping up more gradually.

But millennials are changing their expectations. If that wasn't happening the condo boom in cities like Toronto wouldn't be happening, said Brian Kelcey of Toronto research firm, State of the City Inc.

The flip side, however, is that the baby boomer generation is occupying the housing that the millennials want, choosing over-housing rather than a move outside their traditional single-family home neighbourhoods, he said.

"If we get more duplexes, more townhouses, more of those homes into those areas, we have the capacity in this city, in the cities around us, for tens of thousands more units that actually do meet millennial expectations at the middle and top end of the market," said Kelcey.

Governments need to create policies that encourage the kind of homes that generation needs and wants too, he said.

Meantime, new home buyers are making bigger monthly mortgage payments, according to Canada's federal housing agency.

The average payment has climbed to $1,328 in the fourth quarter of 2016, up 4.6 per cent from $1,269 a year ago, Canada Mortgage and Housing Corp. said Tuesday.

In Toronto, the average payment was $1,826 during the fourth quarter of last year, up 11.5 per cent from $1,638 a year prior.

CMHC, which obtained the data from credit monitoring agency Equifax, says mortgage delinquency rates during the fourth quarter of 2016 were 0.34 per cent nationwide compared with 0.35 per cent a year earlier.

The Ipsos online research conducted May 29 and 31, is considered accurate within 2.5 per cent, 19 times out of 20.