An overwhelming majority of Canadians remain confident about the long-term financial performance of residential real estate, according to a recent report by Mustel Group and Sotheby’s International Realty Canada. 

The generational trends report, which surveyed 2,000 Canadians aged between 18 and 77 years old in Vancouver, Calgary, Toronto and Montreal, suggests that 49 per cent of urban Canadians believe that a home or residential real estate purchase will perform the same or better than their other financial investments in the next 12 months. 

Confidence in the real estate market grows to 60 per cent per cent when looking 10 years ahead. 

The report also indicates that one in three (35 per cent) urban Canadians is now more likely to buy a home in the next five years as compared to their intentions in January 2020, while a similar percentage (35 per cent) of those who already own a home are more likely to sell within the next five years than they were before the pandemic.

Baby Boomers most optimistic about performance

The report highlights that confidence in the real estate market’s performance is high across all generations, with Baby Boomers being the most optimistic group, particularly in the short term. 

Among all metropolitan areas, 28 per cent of Baby Boomers believe that real estate will outperform their financial investments in a year, compared to 23 per cent of urban Canadians in general. 

Approximately 60 per cent of urban Canadians across the generations surveyed believe that a home or residential real estate purchase will perform the same or better than their financial investments in the next 10 years, including 35 per cent who believe it will outperform them in that time and 24 per cent who believe performance will be on par. 

Urban Baby Boomers are also the most likely to believe that real estate will outperform their other financial investments in a decade, at a rate of 44 per cent, while 21 per cent believe performance will be the same. 

Millennials less likely to sell

The report also suggests that the pandemic has had the least influence on Generation X and Baby Boomers’ likelihood to buy or sell, with more than 4 in 10 (41 per cent and 44 per cent respectively) reporting no change in their propensity to buy compared to January 2020 and another 4 in 10 reporting no change in their propensity to sell.

In contrast, urban Millennials are now less likely than Generation X and Baby Boomers to sell their primary residence in the next five years compared to pre-pandemic, with 32 per cent reporting a reduced propensity to sell, compared to 21 and 23 per cent amongst Generation X and Baby Boomers respectively.

Positive outlook despite economic uncertainties

Despite rising interest rates, inflationary pressures and economic uncertainty, the report highlights that confidence in the long-term financial performance of residential real estate remains resilient. 

The report’s findings suggest that the pandemic has not significantly altered the overall confidence in the Canadian real estate market. It remains an attractive asset class for investors across all generations.

Find the full Generational Trends Report, including a regional breakdown, here. 

REM Editorial Team