The Liberal government and Finance Minister Bill Morneau have promised to look for ways to make homeownership more accessible for the millennial population in the country. A new RBC Economic Research report reveals that Canadian millennials aren’t doing too bad when compared to other countries around the world.
According to BNN Bloomberg, the RBC report found that on average, over 40% of homes in Canada are owned by those under the age of 35. This number is “historically” higher than in other countries such as the United States, for example, where 34.5% of those under 35 own their homes.
The city with the most millennial homeowners is Calgary, Alberta where 50.6% of “households under 35” own their homes. Comparatively, Victoria, British Columbia scores the lowest in the country, where only 27.4% of the same age group are homeowners.
Hot and cold markets like Toronto and Vancouver had “some of the highest ownership rates among the major cities included in the report’s global ranking.”
RBC acknowledges that there are affordability issues in these expensive markets, noting that long-term solutions rest on increased supply.
“What millennials in Vancouver and Toronto really need is more inventory of homes they can afford, and a better mix of housing options – be it to own or rent,” said the RBC report. “Solving the supply issue isn’t the federal government’s responsibility alone but requires a concerted effort across all levels of government.”
RBC is calling for new regulations to remove barriers that stall developers and builders from making new housing in response to high demand.
Building Industry and Land Development Association CEO David Wilkes says there are some quick fixes that can happen in Ottawa concerning the upcoming federal budget.
“I would put my money on some changes around amortization periods,” said Wilkes to BNN Bloomberg. “I do believe that there needs to be changes on the stress tests and have it be a fluid tool rather than a static one.”
Wilkes added, “We’re very hopeful that we will see change to address affordability because we are hearing about it from our customers on a day-to-day basis.”
RBC expects new measures to only offer short-term relief.
“If Minister Morneau’s heart is set on doing something on housing in his budget next month, he would do well to focus on supply issues and let the home ownership rate fall where it may.”