Young professionals moving east for homes

Young professionals who want to own a home may have no choice but to move to the East. Patricia Lazzari, President, Association of Real Estate Agents (AREA), said spiralling high prices in the west is a deterrent for young people. “Those that are reasonably low priced go very quickly, so sometimes it is very hard to find homes for young professionals and newlyweds,” she said. Lazzari, an agent for Eckel, Quesnel and Lazzari, said young professionals are usually looking for properties priced between $350,000 to $850,000. Unfortunately, Lazzari said a three bedroom townhouse in the West starts at about $800,000. The lower price bracket is only available in the East, she said. Lazzari said that what these professionals usually have to end up doing, is rent for a while and accumulate the ten percent deposit required as a downpayment for a home, adding that many people just starting their lives usually do not have that kind of money.

Lazzari said she does not think that young people will have a problem with sourcing loans from banks, since financial institutions are always willing to lend, especially for properties. She reiterated, that the main problem is not being able to find the suitable property. She recommended that people go to a bank or finance house and work out their finances. With a shortage of land, young professionals are heading east. Trincity, which she believes will be quite popular, is a little more affordable than properties in the West. The real estate agent said that Central is also growing rapidly, and that land prices are quite low in that area. Another agent said purchasing a first home is very exciting but professionals and young couples must be realistic about what they can afford. “Sometimes newlyweds and other young people put everything on their ‘wish list’ and they cannot always afford that much.”

Owning a home, this agent says, builds equity as the home appreciates in value and the couple saves money on income taxes, through the deduction of interest on their mortgage. He also suggests that when buying a first home people should seek the assistance of an agent. “With their first purchase, they should use a real estate agent. They should not do it on their own. The reason being there are too many issues for them to be going through on their own. The first time, they would be better served by letting a professional show them through,” he said. He said they should also determine what they can spend. “If they have not already, a couple must work out a budget, determine how much they can realistically afford and look at financing options.” Some agencies, he noted can help people work out a budget and explain the various programmes available. “Often, young people only deal with their immediate needs and have not developed long-term financial plans. They may need help working out the details.”

Often, he noted, it is wise to be pre-qualified for a mortgage, so that the couple knows exactly what a lender will give them. Sometimes, he added, after they are pre-qualified, a couple finds that they just cannot buy a home immediately because they have not established credit or they do not have sufficient income. The agent, he said should work with the couple to find houses so the couple can see what they can purchase within their budget. “For some couples whose dreams are bigger than their wallets, that can be disappointing and they may need time to adjust their thinking.” “Fixer-uppers,” he said are great values for couples who do not mind putting in some “sweat equity.” He explained that they can buy a house, fix it up themselves, bring up the value, so that on resale, they can make enough money to cover the closing costs of a new home. Davie Seukeran, office manager, Tucker Real Estate, noted too that young couples want something between $600,000 to $800,000 but properties in the West can exceed $1 million.        

R Taylor, director, Dream Homes and Property Advisors Real Estate Services Ltd said the problem with first time home buyers, in addition to the cost of properties, is the fact that some of them cannot afford to make the ten percent down-payment required to purchase a home. Additionally, she said, their inexperience in mortgage and finance issues is a hindrance. Taylor said that while some people are able to make the ten percent deposit, many cannot afford it and sometimes have to rent until they can save that deposit. She noted that sometimes some couples are looking for homes under $250,000, but said that they would be lucky to find a house in that price range.