Despite stories of people being squeezed out of Canada’s biggest cities by high house prices and rising rents, more young people are actually moving in rather than moving out, according to a new report by RBC Economic Research.
The report looks at population growth for the 20-34 age cohort, also known as millennials. There’s been some concern that high costs could drive those young people out of major cities — such as Vancouver — with the potential to create a “generational ghost town.”
But the report released Thursday by RBC senior economist Robert Hogue rejects that idea.
“Vancouver, Toronto and Montreal aren’t being drained of people in their prime household-forming life stage,” Hogue wrote.
He found that those three cities, in particular, are still magnets for young people. For every millennial who leaves each city, Toronto gains seven, and Vancouver and Montreal could gain as many as 12 each.
“While we don’t know for sure who is leaving and why, it’s reasonable to assume the search for more affordable housing is a big factor,” wrote Hogue.
Housing prices in Ontario cities outside of the GTA, such as Hamilton-St. Catharines, Oshawa, Kitchener-Waterloo and Barrie, and in B.C. outside of Vancouver, such as Abbotsford-Mission and Chilliwack, can be between 25-50 per cent cheaper compared to living in the downtown core, according to Hogue
Earlier this year, Vancouver-based analyst Von Bergmann challenged the “brain drain” narrative in that city as well, saying the numbers don’t back up the anecdotes. Bergmann said more young university graduates are coming into the Metro Vancouver area than leaving.
Hogue expects the flow of young people to cities like Toronto, Vancouver and Montreal to continue thanks to strong economic opportunities and cultural appeal.
However, he suspects the rate of home ownership among young people will drop, as more choose to rent.
“High housing prices set an impossibly high bar to clear for many millennials to become homeowners in a big city,” wrote Hogue.