Most young families in Vancouver’s property market remain confident their property values will do as well or better than other investments, despite a recent slowdown in the market, according to a new survey commissioned by a property firm.
In total, 79 per cent of Vancouver respondents to the Mustel Group survey of urban residents, ages 20 to 45, reported they “believe that financial gains on their home will outperform or be on par with financial investments over the next five years.”
“I think that (expectation) is based on how much Vancouver real estate has appreciated,” said Brad Henderson, CEO of Sotheby’s International Realty Canada, the firm that commissioned the survey.
Sotheby’s commissioned the research to generate insight into the property preferences of those between the ages of 20 and 45, so-called Millennials and younger Gen-Xers, which Henderson said generated some surprising results around their attitudes toward condominium living.
“Even if (property values) are giving back a little now in certain areas, the overall feeling is that (they are) confident markets will continue to perform well over the long haul,” Henderson said.
Vancouver is now several months into a market slowdown that, in September, saw 41-per-cent fewer sales than the same month a year ago and benchmark prices decline, particularly for detached homes.
On Vancouver’s east side, September’s benchmark, an average for typical homes sold, had dipped four per cent to $1.5 million compared to the same month a year ago. On the west side, it was down 11 per cent to $3.3 million.
“Right now, it is definitely a buyer’s market in Vancouver and that is good news,” Henderson said, giving those who are in the market more time to make offers with conditions such as making sales subject to inspection.
How much further sales and prices might fall, Henderson is willing to debate.
New stress tests mandated by regulators, with higher thresholds for approving mortgages, foreign-buyer taxes and in Vancouver, empty-home taxes have all contributed to curbing housing demand in Vancouver.
But “to time the absolute bottom or to time the absolute top (of the market) is a very difficult situation to be in,” Henderson said.
Mustel conducted the survey on Sotheby’s behalf polling 1,743 so-called Millennial and Generation X families in the cities of Vancouver, Calgary, Toronto and Montreal to survey attitudes about home-ownership among those age groups versus common assumptions, said Henderson.
“There’s a lot of speculation around who they are and what their preferences are, but no one has spent considerable time surveying them and getting specific answers,” Henderson said.
For instance, the survey found that some 78 per cent of Vancouver respondents would prefer to own detached homes, if money were no object. However, some 55 per cent of those who don’t already own a detached home have given up on the idea of purchasing one.
More young Vancouver families reported a preference for living in higher-density housing, such as townhouses or condos (22 per cent) than other cities in the survey.
However, Henderson said they were still a little surprised the number wasn’t higher, especially in other cities.
“More people would have thought their preferences would be to have lock-and-leave condos or town homes,” Henderson said.
In Calgary, just nine per cent of respondents said their ownership preferences were for higher-density housing, versus 91 per cent for detached houses.
In Toronto just 18 per cent of respondents professed a preference for higher-density versus 82 per cent for detached homes. In Montreal, the numbers were 16 per cent and 84 per cent.
However, despite preferences for single-family living, those respondents who do own property, most acknowledged they were happy with where they are living, to some extent.
In Vancouver, some 90 per cent expressed “some level of satisfaction with their home purchase,” though the segment who said they were “very satisfied” was the lowest (40 per cent) compared with those in other cities.
Henderson said the survey released Thursday is the latest in Sotheby’s efforts to gather data on the generations that will inherit wealth from earlier generations.
“It’s a group of about nine-million people, non-trivial in size,” Henderson said.