Recently, Westbow Capital had the opportunity to write a feature article for Exempt Market Dealer, Raintree Financial. The article focused on the trends of Millennial Homeownership and can be found below.
The homeownership landscape is changing. Millennial buying power in the Canadian Real Estate Market is lower than the generations before, which has led to an increased demand in low-to-mid density rental housing within suburban communities. Due to these trends, now is the ideal time to own and manage these types of rentals. Westbow Capital acquires and manages low-to-mid density rentals in communities in Western Canada.
Millennial Trends in Homebuying
We hear it often; Millennials are different than any other generation before. They’re getting married later in life, are more focused on careers and are spending less money on everyday items and more on luxuries. Part of this trend is a decrease in Millennial home buying and rather renting their living accommodations.
Many factors have hindered Millennials’ progression in the housing marketing, including: the financial crisis between 2008 and 2009, high unemployment rates, tighter mortgage rules and increasing housing prices, to name a few. Despite being better educated than their parents, their rate of wealth accumulation pales in comparison.
The buying power of Millennials in real estate isn’t getting any better. Since the introduction of the mortgage stress test in January (making it harder to get approved and increasing minimum down payments) and rising interest rates elevating borrowing costs, opportunities to get into the housing market have diminished. The demand for housing is not falling any time 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.
Millennial Trends and Westbow Capital
The age of Millennials is now between 23 to 37 years old, reaching the age of household formation and increasing the demand for single family and low-to-mid density homes. Due to the lack of affordable buying possibilities, many Millennials are switching to renting as a housing option. According to The Urban Institute 74% of Millennials are currently renting in Western Canada, in comparison to 62% of Generation Xers renting in 2000.*
Westbow Capital has recognized this trend and acquires and manages Multi-Family and low-to-mid density Rentals in Western Canada.
Westbow Capital’s Strategy
Westbow Capital is a Real Estate Trust with a strategy that includes buying, holding, and renting properties in Western Canada. It is the culmination of the many years of experience within the construction, real estate and development arenas. Having a strong relationship with Westbow Construction, a low-to-mid density housing contractor, allows Westbow Capital to utilize over 40 years of experience to seize trends available in the market.
*Millennial Homeownership, July 2018, Urban Institute: https://www.urban.org/sites/default/files/publication/98729/millennial_homeownership.pdf