Sellers are becoming more active but expectations that they will quit cities may be premature
As the pandemic escalated in severity in 2020, the Canadian housing market was resilient but suburban and rural living saw increased interest.
However, it appears that as things have started to head towards normality, a study of the luxury sector of the market across North America reveals that two thirds of the city-dwelling luxury homeowners polled (who make up 81% of the total) are not running for the hills but plan to remain in a city.
According to new research from real estate firm Engel & Völkers, homeowners planning to sell homes for US$1m+ want to be close to family and the freedom to pursue the lifestyles they want, in the places they want to call home.
But there is a change underway as 80% of these luxury home sellers are millennials or GenXers and almost one third are selling a home for the first time.
4 types of luxury home sellers
Luxury home sales will be driven by four distinct groups including the wealthiest millennials, those from that generation who are starting a business, high earners who are not yet rich, and early retired GenXers.
More than 8 in 10 of the wealthiest millennials, earning $250K+, own properties in urban cities and 96% say that they either have their parents living with them or believe they will do so in the future.
Their plan for moving home focuses on staying in a city but having the space and layout to accommodate multigenerational living.
The millennial entrepreneurs group is currently starting a business and is split almost equally into those that plan to remain in urban cities and those looking to move to rural areas.
This split reflects how technology and the experiences of the pandemic have driven a ‘work from anywhere’ mindset and that this group is very family focused.
More than half of all luxury home sellers in 2021 and 2022 will be Covid HENRYs (High Earners, Not Rich Yet) with salaries of $100-250K. They are millennials or Gen-Xers and are keen to travel the world and have experiences. Many work remotely and 41% own a second home.
Early retirement GenXers are bucking the trend for retirees. They are not planning to downsize, in fact with 58% of these sellers having had family move in with them during the pandemic, they are seeking larger homes with more bedrooms. More than half of these retirees are seeking rural homes.
