Every generation dreams of a place to call their own and millennials are no different. In fact, a recent Royal Bank of Canada poll showed that by 2021 half of them intend to be ensconced in the housing market. Things are a little different for the average first-time buyer now than they were 20 years ago. Not only are average home prices in Toronto now up to $751,700 but federal regulations on mortgages now require stress tests so even those with a 20% down payment may still only qualify at higher interest rates. And competition for homes has been fierce for the last several years as fewer homes come on the market.
Luckily, this new generation is better informed about their options than probably any other generation before them and they are willing to do things differently to find their initial down payment:
Ways millennials are funding down payments:
- Staying at home longer to save up
- Borrowing from parents
- Pooling resources with partners/friends
- Shared Accommodations
- Longer Commutes
- Less Expensive Communities
- Smaller properties in urban centres
- Buying new build homes with long time between initial deposits
- Providing personalized offers with letters/photos
The good news is that although there are definite barriers to homeownership for millennials, there are also more resources than ever to help support them, like the RRSP program, The First Time Home Buyer credit and the Land Transfer Tax refund. So every millennial can find the perfect home for them and their first love – their dogs.