Given my stage in life the majority of my peers are renters. I often hear arguments that they would like to own a home but they can't afford it, renting makes more sense for them, or they're not ready. Sometimes, depending on where they are professionally or personally the rental argument may ring true. However, for many twenty somethings in Winnipeg their arguments are growing weaker.
Argument One: I can't afford it
The CMHC recently published average rental statistics in their Fall 2012 projections for Winnipeg. They noted that two bedroom average monthly rents have increased from $875 in October 2011 to $915 in 2012 and are projected to hit $955 in 2013. Rental occupancies are at an extreme low, 1.2% in the city according to CMHC, and rents are climbing as a result. To put things in direct comparison lets compare a $955 rental payment with the following mortgage.
Purchase Price $160,000
25 year amortization
Monthly Payments= $843
At a monthly payment of $843, there's even room to cover some utilities or condo fees.
Argument 2: Renting makes more sense for me
If someone is in a state of transition or instability then this may be true, but for many Yo Pros (Young Professionals) they have finished their education, entered the workforce and are ready to put down some roots. If their employment is secure and see themselves settling in Winnipeg for the forseeable future then why wait? There is a real estate saying that the best time to buy real estate was yesterday. At $955 per month waiting until next year would cost you $11,460 in rent. An amount going straight into your landlords pocket that could've paid your downpayment and then some. Does throwing away 12 grand in one year make sense?
Argument 3: I'm not ready
In Canada we have a wonderful organization called the CMHC which provides first time buyers with a very accessible way into the market. Most notably the ability via morgage insurance to put down a 5% downpayment. To put that into perspective a 5% downpayment on a $160,000 purchase is $8000. For the cost of a 5 year old PT Cruiser you could be living in your own home.
Without even delving into the benefits of investment return, pride of ownership, and ability to customize and renovate your space, buying is something that should be considered now for many young professionals in this city. In all projections, property values are not anticipated to take a significant dive and interest rates will not be staying this low forever. So Yo Pro's of Winnipeg, what are you waiting for?
Amy Quinton is a Realtor in Winnipeg, Manitoba with Century 21 Bachman and Associates. She is committed to providing a high level of service and developing collaborative relationships with her clients in order to help them meet their real estate goals.