Generation gap in Canadian housing market

Let’s face it – people shop differently depending on their ages. This goes for new home and resale real estate as well. Last year, The Mustel Group marketing firm and Sotheby’s International Realty Canada conducted a study called 2023 Canadian Real Estate Market Sentiment: Generational Trends Report. This report measured the confidence levels of 2,000 Canadians between the ages of 18 and 77. Realize, this covers Baby Boomers, Generation X, Millennials and Generation Z in the Vancouver, Calgary, Toronto and Montreal Census Metropolitan Areas. As different as their home purchasing attitudes may be, they showed confidence in the real estate market overall.

Baby Boomers

This term is used to represent people from the ages of 59 to 77 years of age (59 to 68 are young boomers; 69 to 77 older boomers). Their major goals in purchasing homes and condos were to right-size from larger dwellings to something more compact, and to be closer to family and friends after retirement. All boomers were more likely to purchase in small towns, while younger boomers often preferred rural locations. Younger boomers planned to own their homes for about 20 years, and older boomers bought the newest homes on average. All boomers planned to move a median of about 50 miles.

Generation X

This category includes those of ages 44 to 58. The highest-earning purchasers, they bought the second-largest homes on average. Over half of Generation X members are married, so have two incomes. Many purchased because of a job relocation. Gen X is the most racially and ethnically diverse of home buyers.

Millennials

Aged 25 to 33 (younger) and 34 to 43 (older), millennials represent the largest share of homebuyers. Seventy-five per cent of younger millennials were first-time purchasers. Older millennials had the highest share of married couples at 66 per cent. Young millennials are the most educated, with 80 per cent holding a bachelor’s degree or higher. The average age of a first-time home buyer in Canada is 36 years – understandable, as saving for today’s down payments can take years. Millennials of all ages placed convenience to their jobs and commuting costs the most important considerations in a new home or condo.

Generation Z

In 2023, Generation Z (ages 18 to 24) made up only three per cent of buyers and two per cent of sellers. These people have the lowest household incomes, so entering the market is challenging. These buyers tend to purchase older homes for attainable price points. A more recent study published in May of this year by credit reporting agency TransUnion shows that young members of Generation Z are struggling more nowadays than millennials did at their age 10 years ago. Financial pressures brought on by inflation has caused their credit usage to be higher, especially with credit cards. They may also be the group most likely to turn to the “bank of mom and pop” for financial help.

Regardless of ages, trends and economic cycles, one thing remains consistent among generations: Homeownership is a dream worth pursuing in Canada.