First Time Home Buyers – Not Exactly the Patient Generation
It seems that Generation-Y is in a hurry. Perhaps it is the environment in which they grew up, a fast paced world where the sound bite is king and the invention of instant news in video format replaces the need for a cup of coffee and a morning paper. That, the paper and the coffee bit at least, is a shame. But that is today’s world of instant communication from cell phones, iPads and whatever other electronic gizmo you can think of. All allow instant gratification, and that mindset has traveled into the world of real estate.
This new generation, despite having less income, is somewhat impatient when it comes to buying a first home. To be fair, some do scrimp and save and really work for that purchase. For others, mom and dad may come to the rescue. And some newbies do have realistic expectations of what they can afford in the housing market. But, more and more first-time buyers are trying to recreate the living spaces most often seen on reality shows, sitcoms or soaps.
It’s kind of a split as far as whether that dream home is a single family property or something in a condo or apartment complex. Either way, some younger home buyers are shooting for the stars the first time around. It’s sort of like graduating from your two-wheeled bike to whizzing around the track at NASCAR without taking the time to really master driving a stick-shift. Sometimes you get lucky, and sometimes, well, you get the picture.
Some, given the opportunity, will overextend their budget to get their dream home in the neighborhood they wish and with the upscale features they envision. While the Generation-Y’s penchant for detailed research in amenities and such is admirable, this overextension can mean trouble down the road. Interest rates in Canada are extremely low at the moment. But, this won’t last forever. Sooner or later the Bank of Canada will see fit to raise the mortgage rates.
In the United Kingdom, there are programs that help first-time home buyers get into the market place. A program called Help to Buy has generated mixed reviews from those in the real estate business as well as politicians. It is intended to help new people get into the market by guaranteeing part of the mortgage, giving sellers and financial outlets more peace of mind about first time buyer home transactions. This program also helps buyers already in the market who want to move up to larger, more expensive homes.
If no one buys the less expensive properties, those wanting to upgrade are stuck. Supporters of the program believe this will help the UK market to get back on its feet. Others feel the price of homes will become prohibitive in the future because of the increase in interest and sales. For now Help to Buy is going strong.
Other countries such as Cyprus, Portugal and Spain are offering initiatives to beef up interest in their real estate market. These three countries in particular are offering residency visas to those wanting to invest. That is quite the carrot. Investors are showing interest. That includes China, which may or may not be a surprise.