Canny and Nicholas Ng are weighing options for finding a new home with more space than their downtown condo. (RICHARD LAUNTENS / TORONTO STAR)

They will be a force to be reckoned with as they move into child-bearing years and need more space, observers say.

They have the potential to be the biggest home-buying cohort in history — even bigger than their baby boomer parents.

But where Canada’s millions of millennials will end up living, and how they will impact the real estate market, has just started to play out.

The first wave — boomers’ kids who range in age from 15 to 34 and make up about one-quarter of Canada’s population — are just moving into their prime home-buying years. Many live in Toronto and Vancouver, where job growth has become a major magnet.

Already, those fortunate enough to find a decent, dependable job, rather than just contract work, have been helping drive competition for starter condos and single-family homes.

“Affordability will play a huge factor in who buys what,” says Dana Senagama, principal GTA market analyst for Canada Mortgage and Housing Corp., which has surprisingly little data so far on how the might of the millennials is being felt so far.

The housing boom in Canada’s hottest cities has spilled over into the suburbs, where builders say they are working as fast as they can to meet soaring demand and get homes to market before a much-feared housing bust.

With the supply of existing homes at a six-year low and the average price up 11.2 per cent from a year ago, according to data released on Friday, new developments have become the next frontier in a what some fear is a housing bubble.

Canadian new home prices rose 0.7 per cent in May, the largest monthly increase since 2007, Statistics Canada said on Thursday.
Builders with decades of experience say they have not seen anything like it, and are eager to build while the boom lasts.

“It’s definitely ‘Build as quickly as possible and get your pre-sales out,’” said Robert de Wit, chief executive of the Greater Vancouver Home Builders’ Association.

But with land prices rising as quickly as home prices, builders are paying a lot of money now for land that may not have a house on it to sell for two years.

Residential sales activity reported through the MLS® Systems of real estate Boards and Associations in Ontario numbered 27,914 units in May 2016, an increase of 9.3 percent from a year earlier. This was the highest monthly sales figure on record.

Nationally, home sales activity rose 9.6 percent from year-ago levels in May 2016.

Provincial year-to-date home sales were running 10.3 percent above the first five months of 2015. The 100,785 homes that have traded hands so far this year represent the best start to any year on record and also the fastest year to hit the 100,000 mark.

The provincial average price for homes sold in May 2016 was a record $547,860, rising 12.8 percent from a year earlier.

The national average price, by comparison, rose 13.2 percent on a year-over-year basis to $509,460.

Just a few years ago, Ontario’s manufacturing heartland was doing so badly The Economist declared it the “new rust belt.”

Today, with the loonie flying low thanks to low oil prices, the “new rust belt” is looking decidedly less rusty. Auto exports are way up, and so are the prospects of the factory towns that line southern Ontario.

So much so, in fact, that Oshawa — the Canadian home of General Motors — is now the best city in Canada to find work, according to the latest edition of BMO’s labour market report card.

It unseated another southern Ontario city for that crown — Guelph, which has now slipped to second place.

Oshawa’s rise from laggard to leader has been meteoric, up 27 spots in a single year on a ranking with 33 spots. The city’s total number of jobs has grown by nearly 7 percent in a single year.

An aerial view of a General Motors facility in Oshawa, Ont. (Getty Images)

And it isn’t alone. “Cities surrounding the GTA now litter the top quartile” of the ranking, BMO economist Robert Kavcic wrote, including Kingston and the Kitchener-Waterloo region.

Case in point: The auto town of Widnsor, across the river from Detroit. Its jobless rate has plunged to 6.4 per cent from 11.4 per cent in a single year, according to BMO’s data.

B.C. the provincial winner — by far

But looking at things from a provincial perspective, it’s British Columbia, rather than Ontario, that’s the winner.

The sizzling-hot GTA market of the past four years has boiled over, affecting smaller neighboring communities. If you’re an owner in one of these communities, you‘ll have a positive opinion on the effects. If you’re a buyer, your opinion will be less positive.  But one thing is certain: as families become priced out of buying in an overheated Toronto market, they’re being forced to look elsewhere, for lower prices.

The Niagara Region is one area comprised of some smaller communities that are experiencing higher prices because of Toronto’s boiling point in real estate.  Astute investors who are in a position to buy and hold should include Niagara in their search of smaller cities surrounding Toronto. While increasing, prices are still much lower, by comparison.

Economic impact analysis shows potential for more than 21,000 jobs centred around four new GO train stations

An economic impact analysis for the proposed GO train lakeshore east extension through central Oshawa to Bowmanville, with four new stations, shows that a provincial choice to fund the extension would unlock both development and re-development opportunities of more than 60 sites.

The project has the potential to generate $1.1 billion in transit-oriented, walkable urban development that would enable:

• The creation of 21,000 permanent new jobs
• 6,000 person years in construction employment
• 6,000 homes to be built within walking distance of a GO station
• More than $70 million in annual savings for residents related to time, vehicle costs and improved road safety
• A significant reduction in the amount of CO2 emissions by decreasing private vehicle use by 50 million kilometers a year.

The analysis suggests that making the right choice about the GO train lakeshore east extension would drive these results as Bowmanville would gain access to 170,000 additional working age people within a one-hour transit ride. Oshawa would gain access to an additional 74,000. Similar positive effects of extended train service have already been seen elsewhere in Ontario including Guelph, Hamilton, Barrie, Kitchener-Waterloo and Vaughan.

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