Newspaper headlines thunder that housing prices are out of reach of average homebuyers, yet mortgage brokers’ bottom lines remain healthy – what is the true story?
“That’s a tough question. Talking to friends and family who are out on the patios at barbecues, people are concerned about the rise in prices,” says Dave Teixeira, the director for public relations and communications with Dominion Lending Centres
, “but most of my friends are already in homes; they aren’t looking right now.”
Looking at the company’s sales stats from the last couple of month, business continues to grow, Teixeira told MBN, but the media continues to raise the alarm of Millennials being shut out of the housing market.
“If you look at the newspapers, it looks like it is Armageddon out there – so I think there is a bit of a disconnect,” he says. “I think in any market condition, there are going to be negative market conditions out there, and the only thing mortgage brokers can do is navigate those waters.”
There are always going to be troubled areas in our economy and in our industry, continues Teixeira, “but given that information, the message should be to Millennials: maybe you shouldn’t be buying those million-dollar-plus properties.”
While there may be some doom and gloom in the news, once you push that aside, there is a lot of goodness in our marketplace and our industry right now, he says.
Teixeira points to an article published by DLC
’s Chief Economist Sherry Cooper a month ago on Millennials in the Toronto and Vancouver marketplace, showing that Millennials are being priced out of the market – and he finds it amusing that media is treating this as something new.
“That’s always been the case,” says Teixeira. “Eighteen to 25-year-olds cannot afford to live in Rosedale, Toronto or in Shaughnessy in Vancouver. Those markets are for more established individuals. But if you are looking for a starter home or condo, there are plenty of great locations in those metropolitan areas – or do what a lot of us did, and move just outside those metropolitan areas.”
For brokers, it can be an opportunity to take on that role of a life coach for those Millennials who need guidance in where to place their expectations when buying that first home.
“I remember when I bought my first home in my 20s, I’m a Gen-Xer, and it wasn’t my dream home. Now that I’m in my 40s, I have that dream home,” he says. “You need to set those realistic tones for the client. And making sure they understand the upkeep costs, the taxes – and explaining that while they may have the 25 per cent to put down on a home, they may not be able to pay the mortgage and keep the lights on. And really, the mortgage brokers are doing a better job in providing that wholistic view compared to the banks, as to what mortgage product is best for the client.”