We We are moving towards a future in which renting will be the norm. Canada’s homeownership costs are rising quickly and more young people doubt their ability to purchase a home. A A growing number millennials are renting with a different outlook and accepting that they will be living in rented homes their whole lives. Generation Rent is the result. But, with more than 30 percent of Canadians opting for renting and housing demand skyrocketing at an all-time high, rental prices have risen and supply is decreasing. Is homeownership becoming a reality for this generation, or is it a distant dream? What can be done to make this possible? Are generation rents here and staying?
Access to financial guidance
First step in any home buying process is saving for the downpayment. For homes priced at $500,000 or less, it is 5 percent. It can rise to 20 percent for homes that cost $1 million or more. Saving money is not enough for most people. They must be aware of their finances, and how to climb the property ladder. Most consumers are aware that saving money is important to deposit money, but few realize the importance of a safety network and how their choices in savings can impact their ability to save more quickly. By giving the next generation information about how to make a deposit and financial strategies that they can use, you can empower them.
Increase Shared Ownership
Although co-ownership may not be common, it allows people who can’t afford to purchase a home to still own a part of the house and then later buy the rest. This can be done either by cash transfer or rental agreements, or a combination of both. A A portion of the purchase price is used for financing. They can also consider the home their own and live there.
Vancity offers a long-standing Mixer Mortgage. There are many other creative options. This allows friends and family to share the mortgage and home expenses. While real estate automation has made it easier for potential homeowners to assist them, many tenants still don’t know their options. This is a great opportunity to landlords, as it allows them retain tenants until they are able to purchase the property.
Get New Financing Partnerships. The Traditional bank-backed mortgages
Consumers should be able to access more financing through different avenues to increase their chances to purchase a house. Vancouver is a city where the average rent price for a 2 bed apartment is $2,000. Rent prices for a 2 bedroom apartment in Vancouver can average $2,000. Access to finance is crucial for homeownership.
There are many programs, such as the First Time Buyer Incentive, Tax Credit, and the Home Buyers Plan, but a large portion of the population is still excluded. This includes those who aren’t able to save for retirement and those with less than stellar credit histories. Despite all the financial progress, the traditional banks still control the majority of the mortgage market. They also have very strict terms. Canada’s strict mortgage regulations mean that private and alternate financing options often have higher interest rates. In 2018, 20% of mortgage refinance transactions were conducted through private lenders. This further highlights the need for equal terms.
This is the first time that we are looking at a generation who may not see homeownership as their future. Canada is known for being pro housing and anti renting, while other countries consider renting an integral part their culture. As more families and young people are forced to rent their entire lives, this trend is rapidly changing. This change can be made by both private and national institutions. We We need to reduce the gap in housing supply and demand, as well provide better platforms for renters. This will enable landlords to give tenants more choices. The Only then can they realize their main goal: Owning their own home.
