It’s 2019, you’re a millennial, and you keep hearing that Canada’s housing market is beginning to calm down. What does this mean for you? Well, as it turns out—not very much. In fact, for the majority of millennials in Canada, owning a home might be downright impossible regardless of how the market is doing.
What’s the situation?
- In 2017, the average income for someone in their 20s or 30s was $44,000, while the median income for that age group was $38,400. Both figures have barely changed since 2014, and it’s unlikely they’ve increased by a significant amount in 2019.
- On the other hand, housing prices have continued to rise year after year, with the current average cost of a home in Canada sitting at $498,943.
- In 2016, it cost roughly $88,000 a year on average to live in Canada
Of course, those figures vary greatly depending on where you live in Canada—cities like Toronto or Vancouver are quite a bit more expensive than places like Montreal or Fredericton as far as owning or renting property is concerned. The difference is quite significant too: in 2018, the average price for a home in the Greater Vancouver area was $1,095,000 versus $167,744 for a home in Fredericton!
How bad is it, really?
Altogether, this paints a somewhat grim picture for your future. Even with a full-time job and no debt you’d still be struggling to make ends meet, let alone saving enough for a down payment (if you’re saving anything at all!). Home ownership has long been recommended as a safe, practical investment. After all, why give your hard-earned money away in rent when you can own your own place? Unfortunately, this doesn’t necessarily make sense anymore: right now, a mortgage and property taxes can easily cost you a fortune in monthly payments. Depending on where you live, you might be better off just renting and investing the difference instead.
So where’s the good news?
If this all sounds depressing, don’t let it get you down—all hope is not lost! Home ownership is well-established in conventional wisdom, but here’s the thing: millennials are anything but conventional. You’re disruptive to traditional ideas and you aren’t afraid to find new solutions to “solved” problems. Buying a home is a very focused form of ownership, but millennials are the folks that caused the rise of the access/sharing economy—that is, prioritizing access to a whole bunch of things over ownership of a few. The generation that gave us ride-sharing, AirBnB, and Netflix doesn’t have to do things the old-fashioned way.
In this digital age, the workforce you’re a part of is very mobile and often decentralized. That has some interesting implications for how you might approach home ownership:
- According to studies, you’re very likely to move to a new location if it’ll further your career or be a unique experience. You’ll probably do this multiple times in your career. That being the case, owning a home doesn’t necessarily have to be your top priority. It can wait until you’re comfortable in your career and you’ve satisfied your wanderlust.
- Millennials are huge proponents of the “gig economy”. You’re comfortable signing up for short-term, high paying jobs or contracts, and you often wrangle more than one at a time. If saving up for a massive down payment with just one job is a struggle, there’s nothing stopping you from monetizing your hobbies or skills to make some extra cash on the side.
- Millennials are also living at home with their parents for longer than previous generations. While this is indicative of issues with employment opportunities and mounting expenses, it’s also a way millennials have found to save even more while minimizing their cost of living. Ideally, you should own a home when you’re good and ready, and this is one of the ways to ensure you’re working towards that goal without pouring money away in rent.
- You no longer have to live right where you work. If you can work remotely, you’re not restricted to buying property in big metropolitan hubs where it can be prohibitively expensive. It’s becoming common to work from home multiple days a week, or for folks to live somewhere entirely different from where their employers are located, making a longer trip into the office once every few weeks instead of every day. If you’re in the right industry and have internet access, you can buy a home somewhere affordable and still make a decent living.
What’s the bottom line?
Let’s be honest: it’s pretty rough being a millennial right now. But you’re a tough, resilient, and resourceful bunch, so you’ve already found multiple ways to work around buying a home. The straightforward, conventional path to home ownership may not be available to all of you, but that doesn’t mean there isn’t a path at all. Do what your generation has done so successfully already: redefine the path on your own terms.
Freelance writer and communications professional at the University of Toronto. He’s an avid cinephile, voracious reader, and a terror at karaoke bars.