Generation Rent
Here’s what the Guardian is saying about the younger generation’s attitude to homeownership:
In a survey of 8,000 people aged between 20 and 45, only 5% of those described by the Halifax as “Generation Rent” (those with no realistic prospect of getting on the housing ladder) are making spending sacrifices to save towards their first home. The remaining 95% have no spare cash, no interest in saving or are trying but failing to save.
Almost half the people questioned predicted that Britain would become a nation of renters within the next generation.
More change in the States too, in this report in the NY Times:
“The emotional scars left by the collapse are changing the American psyche,” said Pete Flint, chief executive of the housing Web site Trulia. “There was a time when owning a home was a symbol you had made it. Now it’s O.K. not to own.”
But where they can afford housing – Calgary – Gen Y has a different set of priorities from their parents, according to the Calgary Herald:
Younger homebuyers are already affecting neighbourhood designs — and that will change the look of new communities in Calgary, says an industry expert….
Their philosophy of life is much different than that traditionally espoused by typical boomers.
“Their values are about work/life balance, which will have the most impact on housing development to come,” says Shawcross. “They balance needs, wants and desires — and that’s mixed with more social and environmental responsibility.”
Gen Y has a different set of priorities from their parents…..its called progress.
Of course if enough people give up on the idea of buying a house then demand will fall and with it the house prices, which will cause some of those people to re-evaluate. The rumours of the death of home ownership may be a little exaggerated, methinks.
What are the societal effects of a majority of people living in property they don’t own? Will laws be more favourable to the tenant than they are now?
What are the effects of real property ownership being more concentrated in fewer hands?
I think it depends a lot upon the culture. When we stayed in Paris, it was in an apartment that had been rented by the same family for 70 years. It was gorgeous, and they treated it as though it were their own. And in a way, it was.
Our daughter and her husband (32 and 34 years old, respectively) want a house, but are getting used to the idea of a townhouse in a place like Port Moody, near public transportation and open spaces. They’ve lived in the condo they own for about 4 years now, and they’ve found the noise from neighbours and the restrictive rules are difficult to live with. Friends have moved to Port Moody to a townhouse but can’t grow a garden, because the open space nearby means deers in the yard, and strata rules don’t allow them to protect the garden. But with Vancouver area SF home prices as high as they are, they see a town home as a poor second choice.
I don’t know about others. But the Chinese people will never be renters in the near future. Home ownership is so highly valued in Chinese society, which is why it drives the housing market in Vancouver and SF (as noted above).
I suggest what make price in vancouver so high is city policy:
a regular lot in Vancouver has potential for a house rented $2500, a basement rented $1000:
rental yield $3500 -> at nowadays interest rate, value is $700K,
on top of it, you add a laneway house rented $1500, rental yield $5000 -> value $1 million…
and guess what has happened to Vancouver SFH market since city council say it is Ok to turn out your house in multiplex or more?
In Toronto, large lot, are divided: 25foot lot become the norm, and even narrower lot can give way to rowhouse…that gives more stock of simple fee house (no strata…) per acre, smaller lot provide less rental potential hence lower price
33feet lot in vancouver $1M
25feetlot in Toronto $600K
That is all rational…In Toronto, house are designed to raise family…In Vancouver house are designed to provide rental income for wannabe landlord/investor
Who is the responsible of that outcome: city Hall !
if you want keep in check house price in Vancouver:
revoke the laneway housing policy, and go one step further: lead a crackdown onto illegal basement suite !…City council will not do that..
BTW, my previous message doesn’t preclude real estate speculation, which is certainly over inflating house price beyond reasonable (in Richmond, house on 66foot lot sell for $1M, but doesn’t rent for more than $2500…), but it explains in part the fact price are higher here in despite the fact rent level are not.