Access to property is on everyone’s lips, particularly among young people. And with good reason: they have the impression of having literally “missed the boat”, the price of properties having seen a dizzying rise in recent years.
Profile of young buyers in 2024
I recently did a vox pop on my Instagram page (@Elleinvestit) to find out the salary versus mortgage payment of people in my community.
Unsurprisingly, those who have managed to buy a first property with an income of less than $80,000 often fall into four boxes: 1) they bought Before the pandemic; 2) received parental assistance; 3) bought a condo for around $200,000 or 4) bought in a remote area.
For her part, Sandra Allard, a mortgage broker with nearly 20 years of experience, observes quite the opposite among her clientele of first-time buyers.1 : approximately 75% of them raised the down payment on their own, without parental help. “It is only in 25% of cases that we will see a donation from the parents,” she explains.
Average salary and budget of young buyers
The average salary of its young clientele is between $60,000 and $100,000. “In general, they will qualify for a loan of around $300,000, which allows them to purchase a property around $380,000, provided they have amassed a down payment of 20%,” adds Ms. Allard.
“If you start working at 24, stay with your parents as long as possible to raise the necessary down payment,” concludes the expert.
My advice to first-time buyers
My sister became a homeowner during the pandemic. When examining his budget, I recommended that he pay a maximum of $200,000 for his condo. After several months of research, she found a 4 1/2 in Longueuil built in 1986 – completely up to date – which she then renovated piece by piece.
This is my advice to young buyers: take a look at Centris to identify properties that fit your budget. But above all: be prepared to revise your expectations.
My research allowed me to notice that there are still 4 1⁄2 condos in the Greater Montreal area priced at $200,000. No, you won’t have a quartz countertop or heated floor and your kitchen may be made of melamine, but that gives you a foothold in the market.
I am aware that our needs evolve over time, but since my column is aimed at young people, I would like to argue that a condo can be suitable for a young single person without children.
Three tips from a pro
Here are Sandra Allard’s three tips:
- Open a CELIAPP and contribute the maximum amount each year ($8,000), in anticipation of a possible first purchase.
- Do business with a mortgage broker to understand how a mortgage works and to analyze your needs.
- For those who are going to buy or renew their mortgage soon: favor a term of three years or less. At the time of writing, there are fixed rate promotions at 4.99%2 with cash back.
On that note, happy shopping!
1 Most are between 30 and 39 years old.
2 For a period of 39 months.