TD survey reveals this generation is reluctant
to make compromises on location when buying a home
TORONTO, Sept. 21, 2016 /CNW/ - Millennials are applying
the "you only live once" philosophy to their homebuying approach
with nearly half of surveyed Millennials who commute (48 per cent)
saying they are likely to spend more money on a home in order to
live closer to work, compared to only 34 per cent of Canadians as a
whole, according to a new survey from TD.
Most Millennials are 'sorrynotsorry' about compromising their
housing hopes when it comes to purchasing a new home. For example,
an overwhelming majority of those surveyed, 80 per cent, said that
commute time is paramount when buying a home. With location driving
their decision in increasingly expensive urban housing markets,
Millennials, many of whom are first time home buyers, may need to
yield, proceed with caution, and ensure they understand their
complete financial picture.
"While living close to work has many benefits, purchasing a home
in expensive urban cities can come at a price," said Pat Giles, Associate Vice President, Real Estate
Secured Lending at TD. "Finding your dream location means striking
a balance among affordability, your non-negotiables and your
financial future."
A city's magnet of social activities and entertainment make it a
mecca for life-loving Millennials and they are stretching their
dollars to shorten commute times. According to the survey, this
younger generation is unlikely to:
- Move into a smaller house than they initially desired (68 per
cent)
- Sacrifice amenities e.g., convenient access to shops and
services (81 per cent)
- Compromise on their top choice of neighborhood (80 per
cent)
- Give up a primary or secondary car (89 per cent)
"Of course we want it all when it comes to finding our dream
home," said Giles. "But it's important to know what trade-offs
you're willing to make based on what you can afford and where you
are willing to live. If an urban location is paramount, then saving
for a large down payment is important. If you can accept a longer
commute time, you may actually be able to afford more "you only
live once" moments, like vacations, over time."
In today's competitive housing market, TD offers the following
tips to help Millennials make the right financial decisions when
finding their YOLOcation without mortgaging their financial
future:
Goal Setting – When you decide to buy a home, it is
important to make a pros and cons list and weigh them based on
their importance. If your goal is to own a home close to work,
consider the sacrifices that may need to be made on other
desirables such as your targeted neighborhood, or owning a car. Be
sure to seek out professional financial advice as well. Talking to
a mortgage specialist to get a pre-approval can help you understand
where you stand financially, and help you shop with
confidence.
Affordability Map – You no longer have to live in the
urban core to enjoy the amenities of urban life. Grocery stores,
entertainment, and recreational facilities are available in the
suburbs, and in good quantity. While commuting a long distance to
work each day may be less desirable to Millennials, sometimes going
out of the city by 45 minutes to one hour – an average commute time
for many Canadians, according to the TD survey – could mean long
term savings on a home, and a stronger financial future.
Firm Foundation – Take the time to build up a significant
down payment. With a down payment of at least 20 per cent, buyers
can also save on mortgage insurance premiums upfront. Consider
setting up a savings account to regularly put aside money, which
will not only help you save for your ideal home, but will also help
you prepare for other costs such as lawyer's fees and moving costs.
First-time buyers should also consider contributing to an RSP and
benefit from withdrawing up to $25,000 tax-free through the Canadian
government's Home Buyers' Plan.
"Location drives real estate prices, but so do emotions," says
Giles. "Finding the right home on the right street in the right
postal code is possible, especially when you get great advice to
steer you in the right direction."
About the TD YOLOcation Survey
TD Bank Group
commissioned Environics Research Group to conduct a custom survey
of 6,337 Canadians aged 18 and older. Responses were collected
between February 25 and March 17,
2016. This report includes a question to all Canadians, then
a subgroup of 1,753 Millennials, followed by those who commute to
work.
About TD Canada Trust
TD Canada Trust offers personal
and business banking to more than 11.5 million customers. We
provide a wide range of products and services from chequing and
savings accounts, to credit cards, mortgages and business banking,
plus credit protection and credit travel medical insurance, as well
as advice on managing everyday finances. TD Canada Trust makes
banking comfortable with award-winning service and convenience
through 24/7 mobile, internet, telephone and ATM banking, as well
as at over 1,100 branches, with convenient hours to serve customers
better. For more information, please visit: www.tdcanadatrust.com.
TD Canada Trust is the Canadian retail bank of TD Bank Group, the
sixth largest bank in North
America.
SOURCE TD Canada Trust