Canadian millennials remain committed to buying homes, so much so that many are prepared to leave the country’s biggest cities in order to find a house they can afford, according to a survey by Royal LePage.

Millennials are aged 26 to 41. Some 60% of that cohort aim to get out of the rental market, or their parents’ basement, despite some of the highest real-estate prices in the world, the survey said. However, of that group, 52% said they would have to relocate to do it.

Canada’s housing market is cooling, as higher interest rates have curbed feverish demand, reducing the prevalence of multiple-offer bidding wars that characterized the stunning surge in house prices through the pandemic. Still, the country’s larger urban markets remain out of reach for would-be buyers who haven’t had the time to stash enough money for a down payment, or who earn too little to qualify for the mortgages required to buy in places such as the Greater Toronto Area, Vancouver and Montreal.

The survey results could signal that demand for housing in smaller cities and rural areas — which spiked during the pandemic, as the forced shift to remote work made working from anywhere a possibility — could continue, even as all the restrictions tied to COVID-19 fall away. Royal LePage said its study suggests that more than four million young Canadians will be looking to make a purchase between now and 2027.

Three quarters of millennials said that if housing was more affordable, they would prefer to stay in their current city or town. However, 54% do not believe their salaries will increase at a rate that will allow them to buy a home in their current location. When asked what their ideal scenario would be, 19% of respondents said they would prefer to live in the city and work fully remotely, and another 19% said they would prefer to live outside the city and work fully remotely.

“What this survey confirms is that a large number of millennials — whether they live in a city or outside of an urban centre — appreciate the option to work remotely,” Geneviève Langevin, a Royal LePage broker in Montreal, said in the report. “To achieve this, some are choosing to leave the city, although this trend is less common today than it was at the height of the pandemic.”

Take Montreal, where a significant number of millennials appear set to leave, even though housing prices are the cheapest among Canada’s biggest cities.

Some 82% of millennials who do not currently own a home believe they will one day, the highest rate among regions surveyed by Royal LePage; however, 55% of that group said they would have to relocate in order to achieve that milestone.

The average cost of a single detached home in Montreal was $533,300 in July, compared with $1,357,500 in Toronto, $2,000,600 in Vancouver, $643,600 in Calgary, and $770,000 in Ottawa, according to the Canadian Real Estate Association.

Still, the survey found that just 35% of millennials in the Greater Montreal Area are homeowners, lower than all the other big Canadian cities covered in the survey. The cause could be related to wages, as the average annual income in Montreal — $40,079 — is 15.6% lower than the the national average of $47,487, according to CareerBeacon.com.

Still, 61% of Montreal’s millennials plan to purchase a home within the next five years; 56% say they will remain in their current city or town, while 38% say they plan to relocate.

The relatively lower prices in Montreal appear to offer millennials hope of staying that doesn’t exist in other cities. In the Greater Toronto Area (GTA), 59% of millennials who do not currently own a home believe they will one day, but 63% of them said they would have to leave Canada’s biggest city to do so.

In Vancouver, 78% of millennials said that if the cost of living wasn’t an issue, they would choose to continue living there. However, 58% said they didn’t believe their salaries would increase at a rate that would allow them to buy a home in their current location — the highest rate among regions surveyed.

“Policymakers should take note that between millennial demand, immigration and the growing pipeline of those who could not transact over the last two years, more supply is required,” Phil Soper, CEO of Royal LePage, said in the report. “We could see another surge in price appreciation, following short-term economic softening, when these sidelined purchase intenders transact.”

Canada’s Millennials Still Bent on Owning Homes, Even If It Means Relocating by Shantaé Campbell | Financial Post