Millennials take a lot of heat for irresponsible spending habits. For a group that claims to be the first generation that isn’t better off than their parents, their receipts for $12 avocado toast, $18 cocktails, and $35 SoulCycle classes paint a different picture.
That’s only part of the Millennials’ story. While they may be rich in instagrammable experiences, they are notably underrepresented as homeowners. If Millennials would stop going on brewery tours or enjoying a cocktail with their manicures, and instead started saving, they’d be living the white – or rather millennial pink – picket fence dream just like their parents. Right? Wrong.
Millennials are considerably less well-off than their parents. According to an article in the Financial Post, “Canadian millennials are shouldering a particularly heavy burden by historical standards, analysts say, one brought on by dizzying price increases, but also lagging incomes and tighter regulations.”
Simply put, home ownership is so unattainable for most Millennials that spending $20 to have a beer dumped inside your margarita, isn’t as irresponsible as some may think. But, the question remains: how can Millennials make their home-buying dreams come true? Let’s start with strategy.
The obvious answer is to wait patiently and save your money. Make an effort to cook at home instead of going out, walk or transit instead of Ubering, shop less, share delivery costs with friends by combining eCommerce orders. There are plenty of ways to be more frugal, but saving $3.50 a day by drinking the office coffee instead of picking up your Ritual order on the way to work, will only take you so far.
What will help you own a home a little faster?
1. Consider the Suburbs
Moving out of the city is the best way to find more affordable housing. Pickering, Burlington or Hamilton may take you further from your friends and favourite cafes than you’d like to be, but our surrounding suburbs have lots to offer. Plus, the GO Train will take you downtown in a flash… well, 30-60ish minutes.
It’s not always an option, but if you’re lucky enough to have parents or relatives with extra cash on hand, consider asking for their help. Your parents can provide some or all of the down-payment and put your name on title. You’ll pay the mortgage and can arrange the terms of repayment.
3. Join Forces
If you’re more interested in an investment opportunity than a front porch, why not find a few friends and pool your money? This works best with single friends – so there aren’t any financial complications if anything goes awry. If the property isn’t large enough to house all of you, finding renters to cover the cost of the mortgage (and your additional taxes) is an good way to keep costs to a minimum.
It may seem like a distant dream, but home ownership is possible – especially as the market slows down. If you have questions about buying your first home, ask me about the government incentives and tax-breaks that are available to you. Let’s chat!