They are younger and earn less than other homebuyers but their expectations and demands are a lot higher. Welcome to the new world of the first-time buyer.
Generation-Y want it all and now. And that includes a house. A new report by the CMHC shows that this generation is not willing to wait around to get on the property ladder with almost two-thirds of first-time buyers now under the age of 35.
With favourable economic conditions, first-time buyers are now eager to buy with over 30 per cent wanting to make the big purchase within the next five years, compared to 19 per cent of repeat buyers.
Their plans are big but their pockets are not as much and, therefore, there's an increasing reliance on parents to help out with the down-payment. Compared to other homebuyers, nearly two-thirds of first-timers have household incomes of $90,000.
“Contrary to what others are saying, I find that a lot of first-time buyers, and more so young couples, save a lot for their own down-payment. Obviously, there are those that need help but those who want to be like their peers in terms of house ownership are willing to sacrifice to achieve that,” says Jason Dixon from the Property Boutique.
While conscious, this generation of buyers are not exactly realistic. “Unfortunately, many of their expectations do not match the reality of the market,” he says. “Many buyers are set on a number of neighbourhoods where their family and friends live and are willing to over-stretch themselves financially to attain that.”
Dixon adds sellers need to be prepared for a hungry generation of buyers who want to be more informed and demand more information before they sign up.
In terms of property choice, while most favour single-detached houses, they are also more drawn to semi-detached, row/townhouses and apartment/condos compared to repeat buyers.