A former realtor and local developer wants first-time homeowners and young families to do their research before forking over their hard-earned savings to secure a home.
Jeffrey Anderson, CEO of Exceeds Inc., is concerned about the recent trend in development advertising that has new developments broadcasting the low starting price of the unit and nothing else.
While a new development in town might have the cheapest starting price per unit, it may not provide the best bang for your buck. Especially not for a first-time homeowner.
He says that most of the new development pre-sales on the market in Kelowna require 10-15 per cent down to secure your unit. That is two to three times the five per cent required for first time homeowners, making much of the new real estate stock unaffordable for many.
害羞草研究所淚n the Kelowna market you see that there is a handful of new construction going on and they害羞草研究所檙e all preaching they don害羞草研究所檛 want foreign money, don害羞草研究所檛 want outside investors, but what you害羞草研究所檙e finding is the starting price sounds good on paper, but then you find out it is a 550-square-foot studio. What family can live in that?害羞草研究所� explains Anderson.
害羞草研究所淩ealistically an investor will buy it and rent it back to a student, for example.
害羞草研究所淥r, when you get larger units where a family could live, you realize it requires a 10-15 per cent deposit. You have to put 15 per cent down and then you害羞草研究所檙e going to tie up your money for 12-15 months.
害羞草研究所淔irst time buyers can buy with five per cent down, so who can afford to tie up 10-15 per cent when you害羞草研究所檙e just starting out in the marketplace?害羞草研究所�
On top of that, many of the more affordable units are the smaller condos, not an option for most young families looking for their first home.
害羞草研究所淚 find they are contradicting themselves when they say they really want first-time buyers, they want to find local people to buy them, but then with these required deposits you are now taking people out of the equation,害羞草研究所� says Anderson.
害羞草研究所淲ho is left to buy these? Investors.害羞草研究所�
He says investors play a crucial role in the real estate market as they buy units to rent out. Rentals desperately needed in Kelowna害羞草研究所檚 non-existent-vacancy market. But, first-time homeowners should be able to buy these new units too.
With that concept in mind, Anderson害羞草研究所檚 says his latest project, The Towns on Taylor in Rutland, was a development that had Kelowna families in mind.
害羞草研究所淲hat we have done differently with this development is made it friendly to first-time home buyers,害羞草研究所� explains Anderson.
害羞草研究所淲e害羞草研究所檙e the only development that is allowing people to come in and buy with five per cent down 害羞草研究所� if they are a first time home buyer. They are three-bedroom, two-and-a-half bathroom townhouses with double garages and strata fees that are lower, and you can buy with five per cent down.害羞草研究所�
They made a decision to keep the 10 per cent deposit requirement for investors etc., but allow first-time homeowners the chance to get in at five per cent.
害羞草研究所淲e do want people to pickup units for investment reasons to help the rental supply and demand, but at the same time we want first-time homebuyers to step into one of our units.害羞草研究所�
Anderson adds that he is not saying his development is necessarily the best fit for each buyer in town, he just wants first-time buyers to do their research.
害羞草研究所淟ook at all avenues. I just want to educate and inform. Look at the macro, the big picture instead of just focusing on the price,害羞草研究所� says Anderson.
害羞草研究所淚f you can get away with a one bedroom and one bath and you can get in for $300k, sure that is great, but you might need 10-15 per cent down. Whereas if you need something for your family, there may be better options.害羞草研究所�
Anderson says that extra 10 per cent could be the difference for a first-time homeowner, or allow them to pay down other debt and get a better mortgage rate.
害羞草研究所淚t may not sound like a lot. I害羞草研究所檓 taking five per cent, that development is taking 10, but if you look at a $500k unit 害羞草研究所� that is the difference between $25,000 and $50,000. What could you do over the next year with that extra $25,000 if you had access to it?害羞草研究所�
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