Millennials are now the new home buyers. Unfortunately, what most millennials are now looking for in a home, isn't available to them in Toronto.

This could mean that the next political party that vows to focus on the affordability of homes in the next upcoming provincial election, could be victorious, as one third of Ontarian believe housing is a key issue. Data collected from an Ipsos poll of 2,003 participants, which was presented at OREA's Ontario Housing Summit revealed:

  • 60% would support a party that will focus on housing affordability
  • 28% of millennials don't deem it as important as issues such as jobs, healthcare, taxes, and hydro.

The Ontario Housing Summit focused on the wants and needs of millennials, including the struggle with supply, down payments, and mortgage affordability.

This is becoming an issue, because most millennials are leaving their parental home, which in Toronto is at least an average of a single family home worth a $1 million, and wanting the same for themselves. However, this is unattainable.

Luckily, the foreign tax and Fair Housing Plan has been able to cool down the market a little, making it a little bit less stressful for first time home buyers. Now, however, the government must focus on providing a housing supply that is in demand, as millennials seem to be looking for more single family homes now, rather than living high in the sky.

Brian Kelcey of State of the City Inc. suggests that if millennials are seeking to live in a similar area to where they resided with their parents, but can't afford those single family homes, the government should try and build duplexes and townhomes in those areas. Baby boomers continue to occupy the homes that millennials are after, limiting the supply. He believes that it will meet the millennials' expectations by providing affordable housing in a sought after area, giving them the option to opt-out of living in a box in the sky.

The above suggestion seems like a very good solution for the long term, because they'll be able to provide more housing supply and choice to those looking to purchase a home. Additionally, it provides those individuals looking to get out of a condo, to have a more affordable option to transition to before moving into a single family home.

Having a limited supply of affordable homes, it also is worrisome that new home buyers are also paying higher mortgage rates:

  • Ontario: $1,328 (avg/month) in the 4th quarter of 2016, compared to $1,269 (avg) a year ago
  • Toronto: $1,826 (avg/month) in the 4th quarter of last year, compared to $1,638 a year prior

With the housing market presenting a struggle for millennials to afford a home, down payment, and mortgage, housing looks to be the biggest issue that will determine who will win the next provincial election. With a high number of millennials as voters, 60% of which would support a party that is going to focus on housing (based off of the 2,003 involved in the Ipsos poll), each party should place housing affordability high on their "to-do" list.

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