According to a BMO report, at least one in four first-time homebuyers look to family to help make the downpayment – a number that may be low and a situation that is all too common, says one Toronto-area mortgage broker.
“The high price, the market – it has made a lot of homes unattainable for most younger couples looking to buy,” says Alithea Watters, a mortgage agent with CYR Funding. “Of those clients I deal with on the residential end, a lot of them look to family for help on the downpayment. Otherwise, they just couldn’t do it.”
Although Watters primarily focuses on the commercial end of the business with CYR Funding, she is uniquely positioned to comment on the situation faced by a first-time homebuyer.
“I’m getting married next month – to a real estate agent – and just looking around here in Thornhill, there is nothing under six ($600,000),” she says. “It is so much harder to buy around here for younger couples.”
Of the some 2,000 people randomly sampled in the BMO First Time Home Buyer’s Report, 27 per cent expected their parents or another family member to help pay for their first home. Other numbers showed that 68 per cent considered their first home to be only a starter home, with 32 per cent of first-time buyers unsure how long they will live in their first house.
Watters has seen many first-time buyers waiting it out and resorting to renting – and now shying away from the condo market.
“The value of condos has dropped a lot,” Watters told MortgageBrokerNews.ca. “So no – I don’t see people looking to condos as a first house option, looking to build equity to make the jump to a house later on.”