More than six in ten Millennials say moving to
the suburbs is their only way
of owning the home they want
TORONTO, April 17, 2019 /CNW/ - The goal of owning the
home of your dreams is alive and well – especially for Canada's Millennials. According to a new TD
survey, eight in 10 (81 per cent) Canadian Millennials aspire to
own their own home, but financial realities, including the rising
cost of home prices across the country, mean many of today's buyers
need to expand their search to the suburbs in their quest for an
affordable property, even if they're already in the housing
market.
According to the survey, even though a third of Millennials (33
per cent) report that city living is their preference, nearly
two-thirds of Millennials (64 per cent) are willing to consider
going from the urban to suburban life in order to own a home that
meets their existing needs or future goals.
"We're now seeing Millennials looking beyond the city for their
housing needs, particularly as they start thinking about their
needs for the future, like having more space to raise a family,"
said Pat Giles, Vice President, Real
Estate Secured Lending at TD. "As a result, many are choosing the
suburbs to either make the move to a new home or upsize from their
current one, a shift from just a few years ago when city living was
this generation's preference."
The top three factors influencing Millennials' homebuying
decisions are affordability (78 per cent), home size (60 per cent),
and neighbourhood (59 per cent). Specifically, when it comes to
moving outside of the urban centre and into the suburbs,
Millennials say affordability (64 per cent), increased outdoor
space (63 per cent) and larger living areas (62 per cent) are key
factors in their decision to relocate.
Survey results show that in exchange for homeownership,
Millennials are willing to make a number of day-to-day sacrifices
including eating out less (58 per cent), shopping less frequently
(56 per cent) and reducing their entertainment spend (50 per cent).
Interestingly, respondents draw the line at an extended commute –
only 27 per cent of Millennials say they're willing to spend more
time travelling to and from work in exchange for their dream home
in the burbs, ranking their desire to live close to work as another
important purchasing factor (45 per cent).
"Although homes in today's housing market cost much more than
they used to, the desire to own the right home hasn't wavered,
especially for Millennials," said Giles. "And because buying a home
is one of the biggest financial decisions someone will ever make,
even if you've gone through the process before, our priority is
ensuring our customers are prepared and feel confident at every
step of the journey."
Whether you're buying your first or your fifth, TD offers advice
to help reduce stress during the homebuying process:
Planning Your Purchase:
- Assess how much home you can afford: Before you start
your house hunt, it's crucial to understand what you can afford.
You'll want to assess how your lifestyle and other financial
obligations will affect the size of your mortgage and ensure you
can comfortably afford mortgage payments should interest rates rise
in the future. If you already own a home, remember to factor in the
equity from your current property and how it will fit into your
total budget. Tools like the TD Mortgage Affordability Calculator
allow buyers to understand how much home they can afford after
existing equity and down payment, monthly expenses, debt payments
and savings are all taken into consideration.
- Know the difference between being pre-qualified and
pre-approved: While many lenders offer the ability to get you
pre-qualified or pre-approved for a mortgage, the two are not the
same. When you are pre-qualified for a mortgage, you have
a general idea of how much mortgage you might be approved for and
have a much clearer picture of the home you can afford and what
you'll pay each month. Having your mortgage pre-approval in hand
gives you the confidence that you can shop for the right home at
the right price, and also lets sellers know you're serious when you
make an offer. At TD, you can complete your pre-approval online at
www.td.com/online-preapproval.
Making Your Purchase
- Plan for upfront costs: In addition to ongoing mortgage
payments, it's important to understand all upfront costs above your
down payment. Many are one-time expenses at the time of purchase,
such as property assessments and surveys; home inspection fees;
land transfer taxes; notary, legal and title insurance fees;
property tax and utility adjustments; and moving costs. If you're
selling your current home, you'll also have to factor in relator
costs from the sales transaction. Remember to build buffer into
your total budget so you can be prepared if unexpected costs
arise.
- Look beyond the rate: While it might be tempting to make
a mortgage decision based solely on the interest rate, it's key to
understand if your mortgage gives you the flexibility you need. For
example, when you need to respond to an unexpected situation, it is
great to know that you may have the flexibility to speed up, slow
down or even pause a mortgage payment. Not all mortgages are
created equal, so it is important to understand your options before
making a commitment. And when the time comes to prepare for a
mortgage, TD customers can now submit their full mortgage
application online, on their own time and at their own pace.
- Know what's new: From changing mortgage rates to the B20
Stress Test introduced last year, a lot has changed in the Canadian
housing market in recent years. Whether you've already gone through
the home purchasing process, or if this is your first time around
the block, a financial advisor or mortgage specialist can help you
understand what's new in the market so you can make an informed and
confident homebuying decision.
Maintaining Your Purchase
- Consider the total costs of a new home: The costs of
owning a home continue past the day you close on your purchase,
especially if you're upsizing or moving from a condo to a house.
After paying your closing costs, don't assume mortgage payments
will be the sole home-related expense – you'll also have ongoing
financial considerations, such as property taxes and everyday
maintenance. Owning a home comes with additional expenses, and an
emergency fund can help you be prepared for a rainy day, a leaky
faucet or maybe an unplanned lawn mower.
About the TD Spring Homebuying Survey
TD Bank Group
commissioned Environics Research Group to conduct a national online
survey of 1,901 Canadians aged 25 – 69, of which 761 were
Millennials between the ages of 25-34 from across the country.
Responses were collected between February
22 – March 4, 2019. In order
to qualify for this survey respondents had to reside in
Canada and be a current homeowner
or a renter with the intention of buying their next home or first
home.
About TD Bank Group
The Toronto-Dominion Bank
and its subsidiaries are collectively known as TD Bank Group ("TD"
or the "Bank"). TD is the sixth largest bank in North America by branches and serves more than
25 million customers in three key businesses operating in a number
of locations in financial centres around the globe: Canadian
Retail, including TD Canada Trust, TD Auto Finance Canada, TD
Wealth (Canada), TD Direct
Investing, and TD Insurance; U.S. Retail, including TD Bank,
America's Most Convenient Bank®, TD Auto Finance U.S., TD Wealth
(U.S.), and an investment in TD Ameritrade; and Wholesale Banking,
including TD Securities. TD also ranks among the world's leading
online financial services firms, with more than 12 million active
online and mobile customers. TD had $1.3
trillion in assets on January 31,
2019. The Toronto-Dominion Bank trades under the symbol "TD"
on the Toronto and New York Stock
Exchanges.
SOURCE TD Bank Group