The housing crisis creates “Tanguy”

With exorbitant rent prices and scarcity, more and more young adults are having to stay with their parents longer than expected.

In 2021, before the meteoric rise in interest rates, 43% of young adults aged 20 to 29 lived with at least one of their parents in the country. A marked increase compared to the rate of 32.1% in 1991.

We will have to wait for the next census in 2026 to see the evolution of the number of “Tanguy” (in reference to the French comedy released in 2001). But on the ground, there is no doubt that the housing crisis is forcing many to stay with mom and dad.

At home at 26

Julie Lachance, 47, still hosts her 26-year-old son, Justin, in her house in Boisbriand. Does his son have a plan to stand on his own feet soon? “His medium-term plan is to try to get me to buy a house for $800,000 to have more comfort!” she said with a touch of humor.

Justin had a beautiful apartment on Plateau-Mont-Royal, with quartz countertops, for $950 per month. He returned to school and his return home was to be temporary. But today, “it is no longer commendable.” The rent for his old accommodation has since doubled.

“I lack a little privacy, but he is helpful. It is still practical for mowing the lawn and other work!” said Julie.

Build your home

The rent inflation rate has been 7.9% over the past year, according to TD Bank. As for mortgage interest costs, they jumped by 27.4%. A sign that apartments are rare, the vacancy rate was 1.3% last year in Quebec, well below the “equilibrium” rate of 3%.

Result: in Montreal for example, a three and a half (one bedroom) cost more than $1,500 per month last year.

For most young people, the plan is to stay with their parents as long as possible, time to save and amass a fortune to one day buy a house.

But others have found an answer to the scarcity of housing: create their own.

“With the interest rates and prices at the moment, we are not on the verge of buying. I have friends who have thought about buying in gang, but me personally, I’m going to build my own place with my girlfriend’s parents. And I know other people who want to do that too,” says Jacob, met with three of his friends at the ExpoHabitation show in Montreal.

The four friends are studying at the National School of Furniture and Cabinetmaking in Victoriaville, so they intend to put their knowledge to good use.

Refugees of the pandemic

During the pandemic, 33% of adults under the age of 27 returned to live with their parents, according to a study by the Association of Retired Persons in the United States (AARP).

But like in the movie Tanguy, most of these young people “stick” at home. The study shows that two thirds of them continued to live there.

Here in the country, 32% of young people said they wanted to buy a house or move to new rental accommodation in 2022, but decided not to do so because of high prices, according to Statistics Canada.

The compromise

Guillaume Ménard “negotiated” with his parents to rent the basement of the family home, which he converted into a functional apartment.

“I would like to be able to find accommodation to be closer to my work, but it is too expensive everywhere. Here, I pay my parents $750 per month, that’s hard to beat and it allows me to wait until the market becomes accessible again,” says the 32-year-old young man, who works in a clothing store.

Good news for housing seekers: the Bank of Canada should start lowering interest rates as of June 5, according to Desjardins. This should help somewhat to slow the rise in mortgage and rent prices.

“With price pressures easing and the economy weakening, not only are Canadian central bankers taking advantage of a window to reduce interest rates, but they also have a responsibility to ease the burden businesses and households,” says Royce Mendes, head of macroeconomic strategy at Desjardins in a study published on May 31.