What are millennials spending their money on?

In a recent opinion piece in the Globe and Mail, columnist Margaret Wente asserted that the housing market was “rigged against millennials” for one simplistic reason: the Liberal government hamstringing development. While she may be right that land use rules skew towards high-density living (as government policy seeks to protect the greenbelt), the reasons millennials are finding it difficult to get onto the housing ladder are multiple and much more intricate.

“Central planners who think we can’t [be environmentally responsible while giving people ‘what they want’, ie single-family homes with yard] should be forced to live in an apartment block in Oshawa and take the bus to work,” she wrote, like that would be the end of the world.

I’m feeling decidedly curmudgeonly as I write this, but that may be the first issue right there — when did buyers decide that their first home had to be all they ever dreamed of? What’s wrong with a condo in an area they can afford, with plans to move up the ladder when circumstances allow? Besides the obvious sense of entitlement such a statement conveys, it doesn’t give millennials enough credit. Who says they expect fenced yards with their first purchase?

For one thing, the median age for marriage has risen steadily since the 1960s: in 1960, it was 22.8 for men and 20.3 for women, compared to 28.2 and 26.1, respectively, in 2000. The delay in forming family units means that many aren’t looking for a single-family suburban home just yet. Many of the millennials (roughly those aged 18 to 34) I know who buy condos would rather pull their own teeth than mow a lawn, and prefer a downtown lifestyle to the suburbs.

According to Time.com, millennials are spending their money on things besides housing, such as food on the run (29% compared to 19% of consumers overall) and same-day delivery, summed up by consumer psychologist Kit Yarrow as the “I want what I want when I want it” mindset. A Shop.org survey found that millennials were twice as likely as other generations to pay extra for same-day delivery of online purchases.

They love to splurge on their pets, and are more likely to buy (more expensive) organic foods than other generations. They spend on tattoos and piercings more too, and are more likely to make charitable donations at the cash register than others. They also have a distaste for mass-market booze, with sales of craft beer soaring as the generation hits legal drinking age. None of these penchants need to be apologized for — life is all about experiencing things that engage and compel us — but it does mean there’s less left over for real estate.

In 2013, Forbes reported that of the $1.088 trillion spent on worldwide tourism, $217 billion of it came from the younger generation (according to the World Youth Student and Educational Travel Confederation). Today’s younger people are travelling further and staying longer than ever before. In spite of the economic crash of 2008, student spending on travel has increased by 40% since 2007, and the number of trips of more than 60 days have increased over the last five years. There has been a significant increase in those who identify themselves as “flashpackers,” bringing along laptops, smartphones and other high tech gear, all of which costs money.

In September, TD Bank released its national Consumer Spending Index, which revealed that millennials (although they spend mostly cash rather than credit) are spending an average of $26,000 a year on discretionary purchases such as eating out and travel; although that’s $6,000 less than the average consumer, it’s greater by percentage of income than, say, Gen X.

According to Environics, the average household income of millennials in Canada in 2015 was $71,000 compared to $102,000 for Gen X, which means millennials are spending more than 36% of their income on discretionary items, compared to roughly 31% for Gen X.

It’s all evidence that they’re looking for greater work/life balance (which has been revealed to be a top priority when they choose a company for employment as well), which means they’re spending less time chained to their desks and more time doing the things that matter to them.

There’s also the considerable matter of student debt. The average graduate of a four-year program is now bowed under by more than $12,000 in federal student loans and more than  $22,000 in provincial debt (not coincidentally, there has been a significant link found between high student debt loads and mental health, which may help explain all that craft beer!).

There’s no question that house prices, especially in Vancouver and Toronto, are high, but there are still affordable condominiums around for those millennials who want to prioritize homebuying. Those that don’t are free to make any number of alternative and just as worthy choices. It seems to me like a pretty great time to be young.