Redefining luxury housing – Gen Y style
May 04, 2015
Move aside, mom and pop. Make way for the youngins. Baby Boomers have done well in real estate, and some are now "buying up" into larger luxury homes. Many are also helping their children with their own luxury housing purchase.
Gen Y buyers (born from 1980 to 2000), also known as Millennials, are not only becoming more active in this market, they’re helping to redefine it.
A few years ago, GTA luxury housing was largely well-heeled and well established buyers (hello, Baby Boomers), snapping up exclusive highrise condos in the financial district and boutique buildings in Yorkville.
But real estate here continues to boom, buoyed by continuing low interest rates, a solid economy and in-migration to the city. Luxury housing is expanding in every way – home type, location and buyer.
Younger buyers are not just getting into the luxury housing market in increasing numbers, they’re exerting greater influence.
A recent report by Sotheby’s International Realty Canada confirms that Baby Boomers wield the most influence on the luxury real estate market, due to their size and concentration of personal wealth. They’re spending between $2 million and $4 million on luxury housing in Toronto.
When they transfer some of that wealth to the home purchases of their offspring – Gen Yers – market forces begin to change. Gen Y buyers are redefining top-tier homes and neighbourhood standards with changing values and a new set of lifestyle and housing preferences, Sotheby's says.
Despite above average incomes ranging from $80,000 to $250,000 in Toronto, the report says, the vast majority of them receive financial assistance from their Baby Boomer parents. Flush with such cash, Toronto Gen Y homebuyers are typically spending $800,000 to $2 million.
“Younger affluent buyers are the Gen X, Gen Y and Millennials who are finding success in their careers and are the ‘new money,’” says Jeanhy Shim, president of Housing Lab Toronto, an independent housing research and consulting company.
“They have different styles, tastes and sensibilities than their Baby Boomer parents, so naturally their definition of 'luxury' as it relates to the architecture and style of real estate is also different. Typically, these buyers are demanding more modern, contemporary architecture and design. We are seeing this not only in condominium apartments, but also in townhome designs, as well as single-family homes.”
“These kids are becoming more and more successful early on in life, and the Gen Yers want that luxury now!” says Steve Hukari, residential designer for RN Design Ltd., Toronto. He helped Regal Crest Homes design Upper West Side in Thornhill Estates, a community of luxury singles in Vaughan. “I have dealt with many clients of both age groups looking for high-end features in their custom homes.”
“They have an excellent knowledge of technology, including streaming and wireless communication,” adds Jane Lockhart, principal designer of Jane Lockhart Interior Design, Toronto. “As a result, they demand easy-to-access and ready-to-use charging for devices as well as TV, gaming and Internet throughout a home, even where Boomers may not have considered.”
With Gen Yers, she adds, everything old is new again, and they are not adverse to colour or styles gone by. “Think luxe feeling shag carpets or rich, saturated colours such as emerald green, teal or marsala, which boomers would call burgundy. And warm metals like gold, champagne and polished nickel are the metals today. Think this is 80s style? Think again.”
Related reading:
Design advice with Jane Lockhart
About Wayne Karl
Wayne Karl is an award-winning writer and editor with experience in real estate and business. Wayne explores the basics – such as economic fundamentals – you need to examine when buying property. wayne.karl@nexthome.ca