In the face of renewed economic turmoil around the world, Canada’s housing market continues to perform well. To what should we attribute this sustained strength? Low interest rates? Growth in full-time employment? Foreign investment? Yes to all, but how about demographics? Canada’s population is now aged ‘just right’ to be homebuyers.
Even if interest rates had been higher and regulations stiffer, the population factor would still have supported a strong housing market over the past couple of years. And, even with the turmoil emanating from China and elsewhere in the world, it is increasingly easy to understand why the housing market has been performing well in many cities across Canada and why there is room for continued growth in those markets.
Oh, we know: Canadians are old and getting older and that’s the story of our population. Actually though, that is only one story. The other is that there is a large cohort of ‘Millennials’, born since the 1980s, who are now prime aged to get into the housing market. Typical first-time buyers tend to be in their late 20s and early 30s, which is where those Millennials are now sitting. Since some studies have suggested that the typical first-time buyer is 29 years old, let’s look at that segment. For about a decade, as the Millennials started to hit that age, their numbers have been steadily increasing. After falling in number in the early 1990s, in 2004 there were 428,000 29 year olds in Canada. In contrast, that figure grew to 495,000 by 2014 – an increase of 16 per cent. Helped by mortgage rates that slid over that period, of course the number of homebuyers swelled and prices increased accordingly in many markets…
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