Buying your first home may seem like a pricey move, especially for younger people and amidst growing concern Canada’s housing market could crash.
The Canadian Home Builders Association – Lethbridge Region is going on the defensive, saying there’s no danger of that in Lethbridge, adding that the market is strengthened by younger buyers and a diverse southern Alberta economy.
“Even if you look back to when the boom and bust happened, Lethbridge experienced both ends less than anyone else in the country,” said CHBA’s Angie Zuba.
One Lethbirdge home builder is selling condos in the $170,000 range and throwing in a semester of tuition, worth $4,000. The target market? Students.
“With the style of house, the affordability of the multi-family unit we’re offering, the location near the University of Lethbridge, we think it’s a fantastic opportunity,” said Andrew Miller of Daytona Homes.
The organization is chasing what it believes to be a growing demand for ownership among the post-secondary crowd.
The money usually coming from parents, at least as a co-signer on a mortgage.
Even if Mom and Dad are involved, one Lethbridge mortgage broker recommends students ask themselves just how much they can afford.
“Can they handle the payment from a cash flow standpoint?” asks Jim Black of Dominion Lending Centres Mortgage Excellence. “Now they’re also going to have property taxes, possibly condo fees, maintenance.”
Cost certainty plays a role too, locking into a fixed term of about five years to know exactly what you’re paying over the long haul.
The CHBA believes the investment is more than financial.
“It’s giving their children the opportunity to learn what it’s like to be a homeowner, so when they’re ready, they’re knowledgable,” Zuba said.
When it comes to new homes, a $4,000 incentive isn’t out of the ordinary.
“Most new builders offer some type of promotion, whether it be appliances or a trip,” said Black. “This is different, but as far as the dollar amount, it’s still pretty modest.”
The advice being, don’t get caught up in the promotion, but focus on what you can pay.