Rich millennials make room at home for mom and dad, survey suggests

A majority of the wealthiest millennials – those with a household income of more than $250,000 – are expecting their parents to move in with them in the future, with a sizable amount already responsible for the care of at least one parent, according to a recent trend report.

Published by Engel & Volkers, a German-based real estate company, the report surveyed 1,700 people across Canada and the United States in order to assess trends among luxury home sellers in 2021 and 2022. Eleven per cent of respondents were from Canada.

Based on the report, 80 per cent of the richest millennials believe their parents will move in with them in the future. About a third of this same group of respondents said they are already responsible for caring for one of their parents, and 16 per cent said their parents are currently living with them.

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Matt Smith, broker of record at Engel & Volkers in Parry Sound, Ont., said that while Canada’s luxury real estate market has been seeing a number of adults living with their parents, this trend has recently picked up speed, largely due to the pandemic.

“One of the reasons is affordability,” he told CTVNews.ca in a phone interview on Wednesday. “You're having different generations in the family combine their assets and combine their capital to be able to afford something that the whole family [of] different generations can live in.”

Smith described this not only as a good way for families to save money, but to accumulate wealth in the long run as well.

“If somebody is living in a million-dollar house and the market goes up 10 per cent, they made $100,000. But if you're in a $4-million house and the market goes up 10 per cent, that family just accumulated another $400,000 in wealth,” he said. “It's the same percentage, but the actual dollar amount is much greater.”

He also pointed to other factors at play, such as travel restrictions that have made it difficult to visit relatives in other parts of Canada or the world. There have also been concerns over conditions in long-term care homes, said Smith, leading younger luxury homebuyers to avoid seeking out this type of care for baby boomer relatives if they can.

“They're all kind of looking at a backup plan for mom and dad,” he said.

WEALTHY MILLENNIALS IN SEARCH OF BIGGER HOMES

In terms of how this translates to luxury real estate market trends, Smith said there’s been greater desire among these buyers for more room. In their next house, 73 per cent of luxury homesellers said they are looking for more bedrooms, for example. A luxury home is considered to have a price tag of $1 million or more.

“There's definitely a greater demand for space,” he said. “Nobody's looking to downsize right now, everybody's looking for bigger homes, whether it's bigger square footage or more bedrooms.”

Looking specifically at Ontario’s luxury real estate market just five years ago, not many properties could support 10 or 12 family members living together, said Smith. But this trend is something people can expect to see more of in the province.

“If you look at the growth from along [Highway] 400 heading north, the properties are getting bigger and the actual square footage of the homes are getting bigger,” he said. “You take a quick drive up to King City now, and that is the norm, some 50 micro mansions all over the place.

“It's very common and we're expecting that to grow from Toronto outwards.”

This is also leading to a search for more amenities, another major trend Smith expects to see continue in the new year, with a greater desire for home gyms, office space and other recreational amenities such as swimming pools or tennis courts.

“They want to contain all these things so they have the ability to do them within their own home,” he said. “They don't want to be dependent on the outside world for additional space or amenities, they want to bring it all under one roof.”

YOUNGER HOMESELLERS EXPECTED TO DRIVE NEXT YEAR’S LUXURY MARKET

The trend report also shows that younger generations are projected to sell more homes next year than baby boomers. Eighty per cent of luxury home sellers next year will be millennials and gen-Xers, adults between the ages of about 20 and 55. A large part of the reason for this has been pandemic lockdowns driving this demographic to look for a change of scenery, said Smith.

“Millennials [and] gen-Xers, they're notoriously transient people [with] the very nomadic lifestyles that they live,” he said. “They're not a generation that likes to stay still…they like to travel [and] they're all about the experience.”

This can be seen in more of these wealthier adults looking to distribute their capital across different properties, Smith said. Instead of having all their equity in one place, they’ll spread it out across two or three different properties, giving them the ability to travel. More than two-thirds of luxury home sellers said they own multiple homes. This driving force is likely to lead to a year with plenty of action in this market, he said.

“It’s anticipated to be a pretty robust year in terms of movement,” said Smith.