Episode 17: How Different Generations are Rocking Canadian Real Estate

We might think we know what characteristics define each generation, even when it comes to real estate. Baby Boomers are downsizing, Millennials can’t afford to break into the market, Gen Z are tech obsessed, and Gen X… who are Gen X again? But are any of these prevailing notions true, or are they just stereotypes?

In this special episode of REAL TIME, we talk to four REALTORS® from across the country about their experiences with clients of all ages and how each generation is navigating and redefining the landscape. First, we chat Gen X and Gen Z trends with Davelle Morrison and Austin Titus. Later, we explore what’s hot in real estate for Baby Boomers and Millennials with Rob Marland and Tanya Eklund.

Transcript

Erin Davis: Welcome to REAL TIME, the podcast for and about Canadian REALTORS®, brought to you by the Canadian Real Estate Association. I'm your host, Erin Davis and what a pleasure it is to bring you today's 17th episode. See, we're bringing the generations together all in one place, exploring just how different and how alike Canadian buyers and sellers of all ages really are, as we all navigate and redefine the real estate landscape. Shifts in real estate are often cyclical. As one generation moves into retirement, the next takes its place as the primary market contributor or at least, that used to go without saying.

Today, with economic swings, new technologies, the pandemic and other contributing factors, it seems multiple generations are vying for the same opportunities, though, perhaps for different reasons. Today on REAL TIME, we're opening up the floor and the lines of communication among four highly accomplished REALTORS®, each of whom represents a different generation themselves, Gen Z, Millennials or Gen Y, Gen X and Boomers. Let's start with Gen Z, defined as anyone aged six to 24 and represented here today by Austin Titus from London, Ontario. He is a broker awarded top 30 Under 30 in 2019 and 2020.

From Gen X, which spans ages 41 to 56, a high-profile Toronto area REALTOR® and investor who's ranked in the top eight in sales volume and transactions completed in 2020, plus 13th for sales among her companie’s agents to Davelle Morrison.

In your experience, both of you, what differentiates younger buyers, Gen Z, for example, from the generation of buyers like Gen X, Davelle?

Davelle Morrison: I think the main thing is that because they are older, and they have been earning more income that they are more established in the market. Most of them are not first-time home buyers. They're move-up buyers, so they're looking at their second place or their third place or in some cases, they're looking for an investment property or they're looking for a cottage property. I think that's the biggest difference. My Gen Z people, of course, because of their age, it's their first purchase ever, that's what they're looking to do.

Erin: Who are you finding, Austin, Gen Z, what are they looking for, primarily?

Austin Titus: Gen Z is pretty much looking for that starter property rate. They're looking to get into the market, develop themselves and potentially move on in the future. I've been finding a lot of people in that Gen Z bracket are more leaning towards the condo's market, townhouses, what's more affordable out there that they can get into, as well as potentially outside of the urban markets. They might be looking more towards, for example, one that I'm in right now or even outside of that area.

Erin: Let's look at what all of this knowledge that we are able to glean online has done for Gen Xers and Gen Zs, in terms of what they come to you already knowing. Davelle, do you find that Gen Z, the ones that you have dealt with, have a good understanding of the market and perhaps, more than previous generations? What's your take on Gen Z in this case?

Davelle: I think because of the Internet and because everybody can Google, I think that when Gen Z comes to you, they are definitely a little bit more educated. I also host online webinars for my clients to help them become more educated in the first-time homebuyer process. Absolutely, there's definitely always questions. In a lot of the cases, Gen Z has a parent in tow as well, so the parent is there, guiding them as well, but the other challenge sometimes is that the parents' expectations of what their child can get in a condo are unrealistic because they're basing it on when they were young and when they bought something and that's not the case.

A lot of the times, you've got a parent in tow who's most likely co-signing or helping with a down payment. They are part of the decision-making program as well too. Whether it's having that parent tag along on a home inspection or a second visit, but they are usually a significant part of the equation. In fact, back in the day pre-COVID, when we could do open houses, I would usually recommend to my clients after they'd seen a house with me or a condo with me that they like, I would suggest to them, "Go back on the weekends with your parents at the open house and take another look," because I know that the parents are a significant factor in the decision-making.

Erin: Austin, you've described yourself at times as one of the REALTORS® who has to play dream crusher. It's not as much fun as Candy Crush either, but when it comes to Gen Z, can you explain that and how do you go about doing that, gently, realistically?

Austin: Absolutely. I think it really starts with going through that pre-approval process and having clients to understand exactly what they're able to afford out there. After that, we go through the consultation and we really look down and see, "Okay, here's your idea of what you are looking for in a property, but what does that actually get you in today's market? We're going to have everyone that's painting the dream for you and what you're hoping to get, but when it comes down to it, what does that look like?" What our role has been becoming is essentially that, exactly what you said, a dream crusher. Where we're now sitting down and saying, "Yes, what you had aimed for last year and what you can afford this year are very different things."

It's our job now to also paint that picture and make it a good one for these people to say, "Look, you might not be getting the pool and the five-bedroom home and the double-car garage, but you are going to be getting something that is going to allow you to get to that place of financial freedom and get into the dream home in the future."

Erin: That's fantastic. Let's talk about Gen Z and Gen X, in terms of what is driving their real estate decisions? Is there anything that stands out to you, that we haven't already discussed?

Davelle: I would just say lifestyle. I think that when people, they live in a certain space and then all of a sudden they realize they're tired of the space or they're tired of the neighbourhood and then all of a sudden they want a bigger space. I would say that that really tends to drive decision-making and also family lifestyle. For some people, they're single, but now they're coupled, so now they need a bigger space. For some other people, they're coupled and now they're expecting a child, so now they need a bigger space. For others, it's they're coupled, they've got one child, but now they're expecting another child, so now they need more space.

I had one couple that I worked with last year, they were pregnant and needed more space for two children. One of the things that she said to me was during COVID, all the playgrounds were locked down and she couldn't use them for her child. She said, "I now need to make sure I have a backyard, so that if the playgrounds get locked down again, my child can play in the yard." I think it's really interesting that COVID is taking decisions, I think that what people would have needed five years to decide, it's making them make those decisions very quickly.

Erin: Isn't that interesting, that things we took for granted, right?

Davelle: Yes.

Erin: Wow. Let's talk money here. Davelle, you have said that there is no longer any stigma, in fact, it's almost the norm for your clients to be with the bank of mommy and daddy, at least that's what we used to call it in our house, that asking your parents to be the lifeline is so much more the norm?

Davelle: Yes, absolutely. I would say that it's definitely a standard thing. People pick up the phone and call bank of mom and dad. It seems like dad's the lifeline. Let me see if I can get more money. I don't care what age my clients are, whether they're 20-something, 30, 40-something or 50-something, everybody's relying on their parents. I think back to when Gen X purchased real estate, a lot of us got help from our parents, to begin with. There's really no shame in asking your parents for money. There's nothing wrong with your parents giving you money if they have it, of course. I realized that not everybody has that luck, where they've got parents who are willing to give or can give.

I think for a lot of parents, they would rather see their kids enjoy that money now, while they're still alive, versus waiting until their kids or whatever it is, 70 or 80 to give them money. I think there's that transfer of wealth that's happening now for parents and I think that's a good thing. Why not?

Erin: Austin, Gen Z is optimistic about home ownership. According to a 2019 survey, 10% of Canadians aged 18 to 24 said they already own their own home and one in three said they're going to buy within the next five years