Millennials – When it comes to the future of real estate, all eyes are on the millennials, who are only now becoming visible in today’s markets.
However, with the millennial generation, we are seeing a shift away from purchasing a primary residence and toward investing in vacation property. What is it about today’s millennial generation that is causing such a shift in the markets?
The millennial generation is the first to be adults in our technology-based society, having grown up in both eras. Along with technological advancements, there have been significant changes in the Canadian real estate market. We have seen an increase in both population and real estate prices in city centres such as Montreal and Toronto. The cost of a home in Toronto has risen, causing a new dynamic shift in the markets, with residents gravitating toward condominiums rather than single-family detached homes. As prices in Ontario’s larger cities rose, a trend among the Millennial generation emerged of purchasing vacation homes, or cottages, outside of the city.
So, what’s the big deal about recreational property? What are these millennials changing the trends for? Simply put, cost-effectiveness. Rising rent and purchase prices in urban areas are altering how millennials and growing families consider their real estate options. The rent for many Toronto homes, apartments, and condominiums has risen. Many families are considering continuing to rent in the city, rather than purchasing a primary home, and instead using their vacation properties as a getaway and/or as an investment property by renting out the cottage when they are not using it.
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Increased work flexibility has also resulted in a trend of millennials leaving crowded city centres in favour of a quieter, less populated location. With the advancement of technology and the ability to work remotely, many millennials can do so. The ability to work remotely broadens the geographical search range available to these millennials, as does the idea of having a home away from the city, even for summer and weekend activities.
The advancement of technology has greatly contributed to the changing trend, as it has become easier in recent years to advertise a vacation rental property to a larger market. Owners can post their rentals on sites like AirBnB, and this information is distributed to a large audience. Although this ability has increased the ease with which rental properties can find tenants, it has also increased competition among rental properties, requiring owners to lower their rental price to compete with other properties at times. It is important to consider the vacation rental demand, and average price in the area you’re considering prior to planning on having a vacation rental.
Whether you’re a millennial looking for a change or planning for the future, there are numerous ways for you to enter the real estate market. Your ideal property is waiting for you if you keep in touch with your realtor on a regular basis. Allow the freedom of changing trends to play a role in your search, and remember to always meet with a local realtor who is familiar with the ins and outs of the area you may call home. Times and technology are changing, but the millennial generation is adapting to new market expectations and trend realities.