There’s “no evidence to suggest” that the cost of housing is driving millennials out of Canada’s largest cities en masse.
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That’s the latest from a newly-released RBC Economic Research report which looked at just how much of an effect high housing prices in Canada’s biggest cities are having on the millennials who choose to call them home.
“Concerns that high and rising housing costs might gut the millennials’ ranks in Canada’s most expensive cities have been greatly exaggerated,” the report said. “For every millennial leaving a major Canadian city for more affordable digs in the same province, there are between seven and 12 millennials moving in from another country or province.”
And Canada’s three biggest cities – Vancouver, Toronto and Montreal – “continue to be “magnets for young, mobile talent,” said the report. “This is the dominant force shaping the urban demographic make-up, not the loss of millennials priced out of the market.”
Apart from what the report said was a “short-lived slowdown in 2015,” the population aged 20-34 in Vancouver, Toronto and Montreal “has grown solidly over the last dozen years.”
That cohort in fact swelled by 96,000 (or 2.9%) in these three cities in 2018 Toronto led the way with a 58,000 rise (up 4.1%), followed by Montreal (up 22,000 or 1.4%) and Vancouver (16,000 or 2.4%).
“No sign” of under-representation
The report noted there’s also no sign that that millennials are becoming under-represented in the country’s three biggest centres.
In fact, it said “their share of the total population has remained largely constant over time.”
That’s not to say that millennials are impervious to high housing costs or that they aren’t leaving the big centres to areas they deem to be more affordable, the report said.
In fact, there were 13,200 more millennials leaving Vancouver, Toronto and Montreal to areas within the same province than millennials making the opposite move last year. That net outflow more than tripled since 2015.
In Vancouver alone, that increase was almost eight-fold.
Still the number of millenials within Canada saying goodbye to the big cities “pales in comparison” with the amount of millennials coming to Canada from abroad and filling the gaps they leave behind.
The report noted that in 2018, net immigration added a total of 76,300 young adults
aged 20-34 to populations of Vancouver, Toronto and Montreal.
In addition, there was also an additional 28,200 net non-permanent resi- dents (mostly students and temporary workers) coming in from abroad and 3,800 net migrants moving from other provinces.
In total, Canada’s three largest cities saw a net inflow of 108,400 millennials from other countries and provinces last year.
As a result, the report said, for every net millennial lost to other cities in the same province, Vancouver, Toronto and Montreal collectively gained roughly eight net millennials from abroad or other parts of the country.
If anything, the inflow of millennial immigrants is poised to grow in the coming years.
Canada will increase its annual immigration target from 330,000 in 2019 to 350,000 in 2021, and it’s the country’s largest cities that will likely get the “lion’s share of newcomers.”
In recent years, Vancouver, Toronto and Montreal together welcomed approximately half of all new immigrants aged 20-34.
At the end of the day, the report said, Vancouver, Toronto and Montreal aren’t being drained of people in their prime “household-forming life stage” and housing demand isn’t at risk of falling anytime soon.
What could fall, however, is the “rate of young households who own a home.”
High housing prices set “an impossibly high bar” to clear for many millennials to become homeowners in a big city.
“Expect a greater proportion of them to rent in the future,” the report concluded.