Living in a Bubble: Millennials and the Overheated Toronto-GTA Housing Market

By Emily Simek, Rahma Kerim, Zeynep Aydin and Marina Mandic

Many of us are familiar with the old drill – two people meet, fall in love, finish school, get jobs, buy their first home, start a family, and live happily ever after. While this has been so for past generations, a lot has changed for today’s Millennials… A far cry from their parents’ generation, Millennials (born between 1980 and 1995) stay in school longer and often find themselves underemployed or in underpaid jobs, living at home with their parents, carrying more debt, having less savings and getting married later in life1. Buying a home in Toronto-GTA’s currently “overheated real estate climate” is thus considerably challenging for many young people.2

Millennials’ confusion and anxiety levels have peaked with the current Toronto-GTA housing market “bubble” creating unaffordable property.We sought to design a research study that would attempt to understand who these GTA-Toronto Millennials are and evaluate their attitudes, experiences, and goals with regards to home ownership. For Millennial home-aspirants (as some from our group), this study served as a timely convergence of social and market issues, and the business implications loom significant for the housing sector.

Segmenting Millennial Home-Buyers

We explored four groups of Millennials cast under two major categories: Owners, who are defined in our study as Millennials who own individually or with another person, and Non-owners, who further divided into three sub-groups:

  • The Intenders – who would like to own a home in the future
  • The Uncertain – who have no concrete plans to own a home
  • The Non-intenders – who have no plans to own a home

In our sample of n=422, Owners represented 37%, Intenders 40%, Uncertains 19% and Non-intenders were the smallest group at 4%

From these four segments of our Millennial population, we sought answers to our major research questions:

  • What are the perceptions, knowledge, and behaviors of Toronto-GTA Millennials in reaction to the current housing market?
  • What are the differences and similarities between Owners and Non-Owners?
  • How do Millennials in general feel about the government’s role/policies in the real estate market?
  • Have Millennials used—or are planning to use—any unconventional ways of acquiring their first home?
  • Is the “dream of homeownership” as the ultimate life goal, still alive among Millennials?

A Mixed-Methods Research Design

To analyze Non-Owners, we ran two focus groups. Also, we conducted individual interviews with homeowners to look for possible differences between them and non-owners. We also conducted key-informant interviews with industry experts like real estate agents, mortgage brokers, and developers. Our online survey was distributed on social media and completed by 422 Millennial residents of Toronto-GTA.

Our data skewed towards cultural diversity and educated women, reflecting Toronto-GTA’s demographics

Key Findings and their Implications

  1. A Millennial Exodus

Non-Owning Millennials’ projection of future homeownership area is surprisingly not aligned with where they currently live. They show a major shift from the downtown core towards the suburbs and beyond, with 33% of Millennial Non-Owners expecting to move outside the GTA.

  1. Downtown is a Tenant City

Renters cluster in downtown Toronto and towards the southern highways (red pins on the map below) and public transportation lines, while owners spread out towards other Toronto and GTA areas (yellow pins on the map below). We have witnessed in our qualitative research that Millennials really enjoy living downtown. Although planning on having kids brings to mind the need for a backyard, we have seen some one-child families holding on desperately to their downtown condos.

  1. A Transformation of the Home

We found a growing top-choice of buying a condo as the first home. 38% of our first time homebuyers expect to buy condos, in contrast to only 29% still dreaming about owning a detached house. This is another indication of the paradigm shift that Real estate mogul Brad Lamb first coined as the “Manhattanization of Toronto”- effects of which include overpriced detached housing and flatlined condo costs.5

  1. Shifting and Alternative Strategies in Home Ownership

Over the course of the last 5 years, the top strategies that Millennials are using to afford their first home appear to be changing. We compared strategies used in the past by current homeowners, to strategies projected by potential first-time homeowners.  Receiving financial aid from family6 and moving outside of a preferred area for home-ownership are persistent trends, while buying a pre-construction home is a noteworthy new trend among first-time home buyers.

Overall, our Millennials are at a crossroads: they have observed that the GTA housing market is overheated and overpriced, and are considering new strategies for entering the market as first-time home buyers.

However, marketers, brokers and realtors must beware, for our Millennials are also divided about the idea of homeownership as a necessity, as only 33% of our surveyed Millennials expect to purchase a home within the next 5 years, leaving the majority of our non-owning Millennials uncertain about a home purchase in their future, and the government’s (non) measures have not helped this sentiment.

Disgruntled Millennials walk away from the housing bubble in majority


The housing “bubble” will likely change the face of the Toronto/GTA population by driving the younger families into the suburbs, and creating a rental class of single, largely pedestrian and public transit-dependent Millennials in the downtown core. Newly suburban Millennials will need to purchase cars for longer commutes, which will see them taking on further debt load in the form of car loans.7

Millennials will have to choose between going into debt8 to afford a real estate asset9 and possibly a new car, to account for a longer commute, versus not acquiring an asset and renting instead, while living their desired urban lifestyle. Millennials will also have to choose if and how they want to “settle down” and start a family, either in a traditional detached home further out of town, or a contemporary option; a central condo or rental.

The Research Team

Emily is a research analyst with an interest in media and marketing. Rahma is an experienced project manager and social researcher. Zeynep is a fully bilingual senior researcher and strategic planner. Marina is an experienced analyst and research consultant. These Humber grads of 2017 collectively represent 416 research in Toronto-GTA and their website sits here.


1- Generation Squeeze . (2014). The Squeeze. Retrieved from Generation Squeeze

2- Simon, W and Nomiyama, Chizu. (2017, May 03). “Toronto house prices, listings surge in April but sales dip”. Retrieved from Reuters Canada:

3- Evans, P. (2017, Mar 17). Two Big Banks Raise Alarm Over Toronto Housing ‘Bubble’. Retrieved from

CBC News:

4- Doug Norris, P. (2016, Jan 22). Millennials: The Generation du Jour. Retrieved from Environics



5- Yelaja, Prithi. (2012, Jul 02). “The Manhattanization of Toronto will change family-housing dreams”.Retrieved from CBC News

6- Kane, Josh. (2017, Feb 28). “Millennials are buying homes but many have parental help: survey. Retrieved from The Globe and Mail

7- Wong, Daniel. (2017, May 08). “Canadians are buying a record number of new cars, with a record amount of financing”. Retrieved from Better Dwelling

8- Anonymous. (2017, January 17). “Vanguard says Bank of Canada will hike rates this year because economy is better than we think”. Retrieved from Financial Post

9- Alini, Erica. (2017, June 20). “As rates rise, Canadians in debt face risk ‘beyond historical experience’: PBO”. Retrieved from Global News

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