A former realtor and local developer wants first-time homeowners and young families to do their research before forking over their hard-earned savings to secure a home.
Jeffrey Anderson, CEO of Exceeds Inc., is concerned about the recent trend in development advertising that has new developments broadcasting the low starting price of the unit and nothing else.
While a new development in town might have the cheapest starting price per unit, it may not provide the best bang for your buck. Especially not for a first-time homeowner.
He says that most of the new development pre-sales on the market in 91大黄鸭 require 10-15 per cent down to secure your unit. That is two to three times the five per cent required for first time homeowners, making much of the new real estate stock unaffordable for many.
鈥淚n the 91大黄鸭 market you see that there is a handful of new construction going on and they鈥檙e all preaching they don鈥檛 want foreign money, don鈥檛 want outside investors, but what you鈥檙e finding is the starting price sounds good on paper, but then you find out it is a 550-square-foot studio. What family can live in that?鈥� explains Anderson.
鈥淩ealistically an investor will buy it and rent it back to a student, for example.
鈥淥r, when you get larger units where a family could live, you realize it requires a 10-15 per cent deposit. You have to put 15 per cent down and then you鈥檙e going to tie up your money for 12-15 months.
鈥淔irst time buyers can buy with five per cent down, so who can afford to tie up 10-15 per cent when you鈥檙e just starting out in the marketplace?鈥�
On top of that, many of the more affordable units are the smaller condos, not an option for most young families looking for their first home.
鈥淚 find they are contradicting themselves when they say they really want first-time buyers, they want to find local people to buy them, but then with these required deposits you are now taking people out of the equation,鈥� says Anderson.
鈥淲ho is left to buy these? Investors.鈥�
He says investors play a crucial role in the real estate market as they buy units to rent out. Rentals desperately needed in 91大黄鸭鈥檚 non-existent-vacancy market. But, first-time homeowners should be able to buy these new units too.
With that concept in mind, Anderson鈥檚 says his latest project, The Towns on Taylor in Rutland, was a development that had 91大黄鸭 families in mind.
鈥淲hat we have done differently with this development is made it friendly to first-time home buyers,鈥� explains Anderson.
鈥淲e鈥檙e the only development that is allowing people to come in and buy with five per cent down 鈥� if they are a first time home buyer. They are three-bedroom, two-and-a-half bathroom townhouses with double garages and strata fees that are lower, and you can buy with five per cent down.鈥�
They made a decision to keep the 10 per cent deposit requirement for investors etc., but allow first-time homeowners the chance to get in at five per cent.
鈥淲e do want people to pickup units for investment reasons to help the rental supply and demand, but at the same time we want first-time homebuyers to step into one of our units.鈥�
Anderson adds that he is not saying his development is necessarily the best fit for each buyer in town, he just wants first-time buyers to do their research.
鈥淟ook at all avenues. I just want to educate and inform. Look at the macro, the big picture instead of just focusing on the price,鈥� says Anderson.
鈥淚f you can get away with a one bedroom and one bath and you can get in for $300k, sure that is great, but you might need 10-15 per cent down. Whereas if you need something for your family, there may be better options.鈥�
Anderson says that extra 10 per cent could be the difference for a first-time homeowner, or allow them to pay down other debt and get a better mortgage rate.
鈥淚t may not sound like a lot. I鈥檓 taking five per cent, that development is taking 10, but if you look at a $500k unit 鈥� that is the difference between $25,000 and $50,000. What could you do over the next year with that extra $25,000 if you had access to it?鈥�
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