Housing market shifts as millennials become key homebuyers in Canada

• By Brian Shaw
• Posted Monday, Apr 14, 2025 11:33 am

Housing market shifts as millennials become key homebuyers in Canada

A new report finds millennials have become the most influential group of homebuyers in Canada.

Millennials, typically defined as those born between 1981 and 1996, are now at the age where they find partners, start families and raise school-aged children, a report from real estate brokerage Zoocasa said.

And millennials account for the largest share of buyers, with 56 per cent of homebuyers aged 25 to 34 and 30 per cent of those aged 35 to 44 actively purchasing homes, the Canadian Mortgage and Housing Corporation said in its 2024 report.

Recent federal policy changes have made many homes more accessible particularly for millennials and Gen Z looking to enter the housing market, Zoocasa said.

As of December 2024, the insured mortgage price cap increased from $1 million to $1.5 million, allowing more home buyers to qualify for mortgage insurance on more expensive homes. The average price for all home types in the Greater Toronto Area was $1,067,186 in December but a detached home will likely top $1.2 million.

Previously, homebuyers needed a minimum 20 per cent down payment for a homes priced above $1 million to be eligible for mortgage insurance. With the higher cap, homes up to $1.5 million qualify. Homebuyers need down payments of at least five per cent on the first $500,000 and 10 per cent on the portion between $500,000 and $1.5 million.

A $1.4 million home previously required a $280,000 down payment (20 per cent), the report noted. With the new insured cap, buyers only need to put down $115,000, which is $165,000 less than before, Zoocasa said. This makes homeownership more accessible to buyers who haven’t been able to save a 20 per cent down payment.

In the GTA, buyers need about $135,000 less to get into the market and younger people are now buying, Zoocasa noted.

“Millennials, in particular, are more tolerant of larger mortgages than previous generations,” Zoocasa said in the report. “With lower down payments, many may stretch their budgets further to afford pricier homes—seeing the trade-off as worth it for getting into the market sooner rather than later.”

The median mortgage debt for millennials was $218,000 in 2019, over 2.5 times their after-tax income ($83,200). In contrast, young baby boomers typically carried far less debt, with a median mortgage of $67,800, roughly equal to their after-tax income, Zoocasa said.

Most millennial and first-time home buyers in Ontario prefer detached and semi-detached homes over condos and now there is more “flexibility to afford higher-priced homes or consider properties that were previously out of reach,” the report noted.....[READ MORE]