How can First Time Home buyer own a property in this market?
Tuesday Mar 12th, 2019
Even though we are seeing some leveling in prices, real estate market affordability in GTA is drastically down. Therefore, First time home Buyers, including young people that just are trying to leave their parents nest and newcomers, are being offered little-to-none, if they would like to buy a house, or any freehold property.
To afford even a freehold townhouse, in most of the GTA, will be in 700’s and how many single people, or families that rely on one income can really qualify for it? Even if they do, they will need to come up with the down payment AND closing costs (which lot of people don’t calculate in their expenses. FYI, closing costs are around 1-2% of purchase price!!).
So, I guess their first home won’t be a house, but don’t give up!!! With a good planning and patience, we can make that “freehold home” dream come true…. in time.
The answer is: START SMALL!
Buy one bedroom condominium, in the building that has positive appreciation, keep it for few years and then sell it. Use the money saved from mortgage “principal” (contact me for detailed explanation about this term) and money saved from appreciation and THEN, you go out and buy your first Freehold home.
The biggest mistake people do today is that they say: “ I will keep saving and once I save enough, I will buy freehold as my first home”…… HUUUUGE mistake! Believe me, unless you hit a lottery jackpot, or some enormous inheritance, there is NO way that you will save enough money for down payment. The difference between percentage of you being able to set aside each month, house price rising AND mortgage rates most likely going up, will just keep growing. You will always be behind…
So, here is the plan.
Check this unit on 225 Webb Drive in Mississauga, just steps from Square One. Great size living/dining room, that can fit a condo size dining table, 9’ ceilings that give that luxury look, 43” kitchen cabinets that can fit plenty of your kitchen pans, plates and other tchotchkes, Stainless steel appliances, granite countertop, backsplash…all features that a “freehold home” should have. Good size bedroom that can easily fit queen size bed, armoire AND a dresser!
4 pc master ensuite bathroom is conveniently there for your privacy, since this condo also have a 2 pc powder room.
As you can see, this home has everything that a young family needs! ... you really don’t need that 2nd and 3rd bedroom, at this time…
If you have visitors coming over, feel free to rent “Guest suite”, that this awesome Solstice building offers. This way, you are still close to your family and friends, your social life is not suffering, plus you will save some money on Gym and YMCA memberships, since there are plenty of amenities in this building including gym, indoor pool, sauna, games room, track and parquetted on 5th floor and the list goes on.
When we look at what this condominium in City Centre Neighbourhood offers, I really don’t see why the First Time Home Buyer would procrastinate and loose a precious time, to start saving from day ONE!
For more information about this unit and similar ones that could be your “start-up” home, feel free to contact me anytime!
Matilda N. – realtor that truly cares!