Optimism in Vancouver’s housing market is divided among generations, according to a new survey by Mustel Group and Sotheby’s International Realty Canada.
Millennials are the generation that have the least amount of confidence in the city’s real estate market and its ability to perform as a financial asset, according to survey results. On the other hand, baby boomers and gen X are the most positive when it comes to Vancouver real estate.
Thirty per cent of millennials believe that over the next 12 months real estate will perform worse than other financial investments. Twenty-three per cent believe that it will be equal.
“A lot of the gen Z’s and the millennials that have come into the market have come in at a time when there has been a shortage of inventory and that’s definitely going to skew their outlook in terms of the market,” said Don Kottick, president and CEO of Sotheby’s International Realty Canada.
While 18 per cent of baby boomers think that real estate will outperform other investments in the next 12 months, 41 per cent believe that real estate will exceed expectations in the next decade.
The aim of the survey was to compare generational sentiments towards the country’s housing market. Mustel and Sotheby’s said it’s the first survey of its kind since January 2020. Since then, mortgage rates have skyrocketed as the Bank of Canada has raised its key rate in a bid to contend with high inflation.
Roughly 31 per cent of Vancouver residents are more likely to buy or sell a home in the coming years than they were pre-pandemic, regardless of generation, with 35 per cent across Canada having the same sentiment, according to the survey.
“That’s one market that saw rapid price escalation during the anomaly years and then it went through more of a correction than some of the other markets. So, there’s probably some residual impacts in the Vancouver market that are a little more pronounced when you compare them to the national average,” said Kottick.
Sixty per cent of Vancouver residents across all generations believe that a real estate purchase will outperform or equal the performance of their financial investments over the next 10 years.
Forty-three per cent of residents across generations have the hope that over the next 12 months a real estate purchase will outperform or remain on par with the performance of their financial investments.
“This shows confidence in the real estate market, not only short term but longer term,” said Kottick. “What it means is that it’s going to put additional pressure on the housing supply, which we all know has a chronic decades-long shortage.”
Survey findings are based on a survey of 2,000 Canadians, ages 18-77, in Calgary, Toronto, Montreal and Vancouver.