There hasn’t been much about the Canadian housing market for Millennials to get excited about.
Urban centres remain largely unaffordable, after all, and the cohort is increasingly relying on parents for help with even a downpayment, to name a couple setbacks.
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But there’s one recent real estate item that Millennials have taken a shining to — at least the older members of the so-called ‘Me Me Me’ Generation.
It’s the Liberal government’s First-Time Home Buyer Incentive, which has come into effect just as the federal election approaches.
So suggests the BMO First-Time Home Buyers Survey.
The online survey of 805 Canadian adults, which pollsters Pollara Strategic Insights conducted on behalf of the bank, found half of “older” first-time homebuyer Millennials say the program is “very useful.”
For the purposes of the survey, older Millennials were defined as those aged 30 to 38.
The shared-equity mortgage scheme sees the federal government contribute as much as 10 percent towards the purchase of a new home, in exchange for a corresponding equity stake in the property.
To participate, a first-time homebuyer household’s income can’t exceed $120,000, and the combined insured mortgage and incentive amount is capped at four times that.
Some critics have noted that the incentive doesn’t go very far in Canada’s most expensive markets, including Toronto and Vancouver, where even the average condo costs more than $500,000.
But Millennials, a large share of whom are in the peak-homebuying age range, don’t seem to mind.
The First-Time Home Buyer Incentive’s appeal for some is easy to see, given 26 percent of respondents find cobbling together a 5 percent downpayment a major challenge and 39 percent consider it a minor challenge.
In addition to trying out the program, first-time homebuyers are open to taking other steps to realize their homeownership dreams.
Nearly 40 percent say they would “make sacrifices in other areas of their lives” just so they can buy a pricier property.
And some 13 percent of first-timers are even willing to purchase a home with ownership costs that will eat up more than 30 percent of their household’s income, a key affordability threshold.
“While first-time home buyers believe that market conditions are favourable for buyers, it’s important to make sure that carrying the costs are sustainable,” says Hassan Pirnia, head of personal lending and home financing products for BMO, in a statement.