Young homebuyers in Alberta are finding the process a bit tougher than they imagined. TD Canada Trust just released a new study this past Tuesday. It shows that potential homebuyers in this group were more likely to note that saving for that down payment is challenging and that property prices are uncomfortably high.
The study looked at several age groups, including the Millennials, otherwise known as Generation Y. They found that housing prices, saving for that down payment and lower salaries were more of an issue for that generation than the Boomers.
But TD Canada Trust’s Sales Manager and Mobile Mortgage Specialist Cheryl Tackalberry noted that home ownership is possible. The initial impression is that it is a daunting proposition but if young homebuyers practice good financial discipline buying that home can become a reality.
The Millennials have a tougher time because they are first time buyers. The Boomers already went through that challenge for the most part, and most of them don’t think it was as tough. That may be true since the Bank of Canada has tightened mortgage rules four times in as many years, with the toughest being in July of 2012. The latest required a bigger down and decreased the loan amortization length.
Up until April 22 of this year, per the Calgary Real Estate Board, the city saw 1,721 sales through the MLS system. That is a 9.9 percent increase over the same period in 2012. An overall increase in sales price by 4.34 percent has a home going for roughly $443,383 on average. The median price has also gone up by 5.03 percent, bringing that average to $397,000.
When surveyed, 64 percent of Gen Y first time homebuyers were having a hard time saving for the down payment, compared with 41 percent of Boomers. Some 65 percent of Gen Y homebuyers thought property prices were much too high, while 14 percent of Boomers were of that opinion. And, 46 percent of Gen Yers noted they did not make enough money to make mortgage payments, while 10 percent of Boomers felt that way.
Millennials living in Alberta were also the most likely to think that the prices of homes will keep increasing over the next year, currently numbering roughly 57 percent.