This can mean different things to different people. It could mean finally leaving your parent’s nest. It could mean stop renting. It could mean leave your roommates, and go at it solo… or anything else in between. Regardless of how you slice it, it stirs up the same emotions. Confidence. Independence. Pride. Yes, those are the happy-go-lucky ones. But for all of the “debbie-downers “out there, yes, there may also be some daunting feelings. Responsibility, maintenance and commitment. For many of us however, it’s a good and “well worth it” trade-off.
For me personally, the decision to move into my own place (condo, of course) after University was an intentional one. One that would force me to stay within the new boundaries of self-reliance and independence that I experienced out of town for post-secondary. It’s a slippery slope to fall back into your parents nest and all of the comforts that come with it. Despite good intentions of your folks, the habits of reliance, laziness and dependence can be hard to kick, and I didn’t want to take two steps back.
So there’s no time like the beginning of a New Year to start pursuing a dream. Nearly half of us do exactly that each January. However, for the 45% of us looking to make a fresh start, only 8% make it to the finish line. When it comes to the dream of home ownership however, I can’t help but wonder if we really even want to make it to the starting line. Are those that make up the large percentage of first time homebuyers even interested in homeownership anymore? I hear and read mixed reviews everywhere.
A recent Atlantic Monthly article in mid 2015 must also have sensed the confusion and tried to put some clarity around the allure of homeownership and whether or not Millennials have the means and/or the desire to buy their own homes. Have the views of home ownership changed for younger generations? The results showed that while both younger and older groups still felt it’s a smart goal – the young just didn’t feel it was achievable.
An article this week in the Toronto Star covered the Millennial generation (15-34 years of age) who total approximately 1.5M of the GTA population. True to their “digital native” label, they’re also described as the first generation who live their early adult life in urban centres. There’s still a fair amount of uncertainty though which has urged real estate associations to study the millennial home ownership decision making process to further understand them. What researchers do know already however, is that this younger generation is willing to spend a huge chunk of cash on rent, averaging $1800/month. But they’re selective and it’s not spent aimlessly. They often opt for something shiny and new, with a great view and great walkability. It’s often a new condo.
But what happens when they get tired of paying rent? It seems more and more women at least, are feeling that way.
The inaugural issue of Women’s Health 2016 categorized four types of the modern woman and coined “the homeowner” as one of them. Women are delaying marriage, pursuing more education and also buying more real estate independently, looking to pursue long term wealth.
According to Robert Kavic of BMO Capital Market, if you’re forming a household or just tired of paying rent, you may as well pay yourself first. That’s the prime law of personal finance.
And it doesn’t always have to be done in the traditional way. One article cited that the weighted combination of down payments is changing. Gifts from supporting family are now forming a larger portion than financial institution loans. Prices are not cheap, but they are achievable for many. And if it makes you feel any better, Toronto’s price to income ratio for housing affordability isn’t number one on the list (Vancouver is).
But just like any other goal – you need to break it down into smaller pieces. (Hopefully we all know by now that your resolution to “lose weight” has a far lower success rate than, “Hit the gym four times a week.”) According to financial behaviourists, this helps you to focus on what your immediate needs are. It can be done. So for those of you interested, read on for Step 1.
Decide how much you want to save and by when, this establishes milestones . This will also help shape the road you travel moving forward – for example – if you want to save $10,000 this year – $/month – you may decide to skip that latte on weekday mornings or order in less and decide to don your apron and do more home cooking. The small choices you make will add up. And remember you don’t have to do it alone. There’s a lot of help waiting for you in the form of government programs as well as financial institutions.
Get ready for the thrill!
Feature Image Source: Toronto Star / Dreamstime