Guelph real estate- wait for it- softened in July, both versus July of 2020 and the previous few months. It’s not completely unexpected for a few reasons, one being that the summer months are always slower than spring and fall.
But more prevalent this year was that real estate wasn’t top of mind like it was in early 2021, because getting outside and enjoying the nice weather has been the priority.
This is something that millennials are following very closely.
Millennials, broadly categorized as those born between 1981 and 1996 are now between the ages of 25- 40. According to the latest census, they represent the largest cohort of the Guelph population at 23%. Compare this to the Baby Boomers, who represent 13% and it’s clear that millennials have clout.
Entry level homes disappearing
The challenge millennials have in respect to housing is that they’re faced with a low supply, high demand market which has resulted in runaway housing prices.
For context, in 2019 homes under $400K were 21% of the total Guelph market. In 2021, homes under $400K represented less than 3% of sales.
In 1980 it took 2x the household income to buy a house in Ontario. In 2020, that number increased to 10x the household income and has increased further in 2021. Boomers had it easier, no doubt about it.
Condo sales and development rising, literally
Guelph has seen significant condo development in recent years, mostly around the downtown area, but with numerous developments in South Guelph as well.
“This high rise supply for housing in Guelph is welcome, and needed,” says Beth Waller. “However, millennials will also find a challenge here, as they’re competing with downsizing baby boomers who are mortgage free. They’re also competing with speculators and investors. It’s not easy.”
Condos offer a wide range of sizes, bedrooms, amenities and price points that meet many of the needs of millennials. Condo sales in Guelph are at new highs for 2021 and make up roughly 22% of the total sales in town.
The other challenge: Baby Boomers aren’t moving
On the other hand, we have Baby Boomers who are living healthier lives for longer. They’re not retiring as early as they used to. They enjoy gardening and are often mortgage free- why should they rush and sell? Where are they going to go?
The Boomer demographic represents the oil in the real estate engine. With this grouping often comes two transactions - both a new purchase and a sale, providing much needed inventory for others. Without the Boomer participation in the market, much of the supply is tied up.
For the Boomers that decide they are going to move on, they’re often aiming to make this their last move. That means careful considerations of maintenance, mobility and size are more carefully weighed. To meet those goals, Boomers have zoned in on condominiums and bungalows.
The problem? That’s what millennials want, too.
But as millennials have shown, they’ll roll with the punches
Millennials are thinking outside the box for non-traditional ways of owning a home: buying a property with an accessory apartment to help with the mortgage, creating multi-generational living arrangements and as we’re starting to see: advances on family inheritance to fund a down payment.
It’s not uncommon to see a first time buyer millennial purchasing a detached home in the $600- $750K range in Guelph. They’re also prepared in more ways than previous generations, using apps that provide them with market information not available ten years ago.
“They’re savvy, they’re prepared and they’re aggressive. As much as millennials get bullied in their sterotypes, we like their style”, says Ryan Waller (a Gen- xer himself)
Beth and Ryan Waller are real estate agents with Home Group Realty and can be found at Bethandryan.ca.
Source: GDAR 2021 year to date, single family residential sales. Statistics Canada and Canada Census (2016) data used for demographic information.