Despite elevated housing costs, concerns that millennials are fleeing Canada’s largest cities are “greatly exaggerated,” RBC Economics said Thursday.

For every millennial leaving the Vancouver, Toronto and Montreal areas for elsewhere in their respective provinces, there are between seven and 12 millennials moving in from other provinces or countries, senior economist Robert Hogue said in a research report. RBC used population data from Statistics Canada in its analysis.

“Vancouver, Toronto and Montreal continue to be magnets for young, mobile talent,” Mr. Hogue said. “This is the dominant force shaping the urban demographic make-up, not the loss of millennials priced out of the market.”

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Over the year ending in mid-2018, the combined population aged 20 to 34 in those three metro areas increased by 96,000, the largest gain over the past 12 years. In each area, those aged 20 to 34 as a percentage of the overall population remains higher than for Canada as a whole. “So millennials are in fact slightly over-represented in the largest cities,” Mr. Hogue noted.

International migration is bolstering the millennial ranks. For the combined metros, immigrants and non-permanent residents (such as students and temporary workers) accounted for the entirety of the millennial population gain.

There is, however, an area where an exodus is undeniably true – and is accelerating.

The Big Three metros are losing young Canadians on an intraprovincial basis – that is, the number of in-province residents moving to those cities is smaller than those making the reverse move. In the most recent year, their combined intraprovincial net outflow was slightly more than 13,000 for those aged 20 and 34, a figure that has been increasing every year since 2010-11.

Relative to the other cities, Greater Toronto’s outflow is especially large. Over the 12 months ending in mid-2018, the net intraprovincial outflow was nearly 50,000 people over all, about four times greater than in 2008-09. Close to 10,000 of them were aged 20 to 34. An increasing number of people are leaving Toronto for cities within commuting distance, such as Barrie, Hamilton and Oshawa, Statscan data show.

“While we don’t know for sure who is leaving and why, it’s reasonable to assume the search for more affordable housing is a big factor,” Mr. Hogue wrote. “Buying a home is between 25 per cent and almost 50 per cent cheaper in the Southern Ontario communities to which many Torontonians flee.”

The average sale price for all home types in Greater Toronto was $759,147 in March, $962,425 in Greater Vancouver, and $399,126 in metro Montreal, according to the Canadian Real Estate Association.

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“You’ve got job growth in areas that people can’t afford to live in,” said Mike Moffatt, an economist at the University of Western Ontario’s Ivey Business School. “You’re forcing people to choose between having a family and a well-paid career.”

In a recent piece on Medium, Mr. Moffatt said Toronto’s outflow “will be the No. 1 political issue for the province over the next 20 years.” The worry, he added by phone, is that people come to view population change as a trade-off – that if there is robust immigration, it means some Canadians can no longer live in Toronto.

“You’re going to start to see the kind of backlash you’ve seen in the U.K., where people can’t afford to live in London,” he said. “You get this situation where you have one very cosmopolitan city [in London] … And then the rest of England is 60 per cent voting ‘Brexit.’ ”

The solution for Toronto, he said, is straight-forward: increase housing supply.

The federal Liberals made millennial home-buying a key priority in its most recent budget, released last month. One policy change will be the introduction of a shared-equity mortgage that first-time, insured buyers can enter into with the Canadian Mortgage and Housing Corp. Full details have yet to be released, but the incentive would be restricted to buyers with a household income below $120,000 a year. Under this plan, buyers could potentially reduce their monthly mortgage payments, but would have to pay back CMHC at a later date.

The incentive drew some criticism from those in the real estate industry, with many saying it would provide limited help to those in expensive housing markets.

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The federal housing agency expects the program to go into effect in September.