Agents sit gen-Yers down for ‘the talk’

by Olivia D'Orazio08 Oct 2014
Many agents are now proactively suggesting gen-Y clients ask family for help with a down payment in anticipation of the growing struggle they’ll face to qualify under tighter lending rules.

“Your clients are tied up in what the bank can give [them],” says Winnipeg-based real estate agent Brad Gross. “They have to save or get a family member to help them out.”

Since the sea-change in mortgage rules ushered in by the federal government in 2012, real estate agents have generally insisted on prequalifying clients for the home they seek. It’s all about ensuring they pass qualifying standards tied to income and debt ratios.

Upping down payment amounts is one way of getting over that hurdle, say mortgage brokers, themselves advocating parental help for young buyers unwilling to wait.

But, Gross says first-time buyers often overlook the helping hand that family members can provide or the fact the CMHC recognizes gift money as an acceptable mechanism for qualifying.

There is, of course, the option of lowering the bar on the type of home clients are searching for but that kind of restraint in hot markets such as Vancouver and Toronto won’t necessarily pay off unless prices dip.

“That’s not something we forecast,” Ted Tsiakopoulos, regional economist with CMHC, told an audience of brokers Tuesday. “There’s still some room for growth here.”

That’s part of the reason for the proactive approach of agents such as Gross, now willing to have those tricky conversations with clients sooner rather than later.


  • by judy 10/8/2014 3:26:50 PM

    It has never been easy to buy that first home, for anyone - even our parents. For my generation (Boomers)we had to tighten our belts for years and do without before buying house, we would not think of asking family and they would not think of offering. Then you needed 25% down. Even if family did help out, it would have been "an obligation" forever. We moved from the city to a smaller town where jobs paid well and homes were cheaper.
    So we did not go out - other than for walks etc., saw the odd movie, made few furniture purchases, drove an old car, made do with few pairs of shoes and clothes, controlled the grocery bill, long distance calls, worked as much overtime as possible, and ate out rarely until we could get a home, and not a mansion - then we started a family. (We did not want to eventually have to move our children.) Even in the years of high interest rates (19 1/2%), we made it work on our own without help. We were able to hang on by our fingernails while people we knew lost their homes, probably because we were able to manage our expenses with the experiences from our pre-buying days.
    Family helped our kids, but, I don't think they have appreciated their homes as we have and certainly have not made the effort to pay them off or care for them as we have. It has also made them more attractive to opportunists. The perceived need for technology and the latest "toys" together the attending service contracts will permanently keep many of the younger generation broke, as will their need to "play". There is not the same strong work ethic. So much time is spent even in the workplace on texting and Face-Book etc. that our economy is suffering and so are our personal communications.
    So - no - I do not feel particularly sorry for the younger generation. A little struggle make a stronger tree.......and bring a couple closer.

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