This week on the program Les Oranges Pressées on CIBL, we look back at a Toronto-Dominion Bank survey on the home ownership of generation Y.
Combine this analysis with La Presse’s report on the weight of this age group in the Greater Montreal area, and you have a little idea of where the Montreal real estate market is headed!
The Weight of Generation Y in Greater Montreal
According to the Optima Marketing study, of the 1.2 million young Ys who will want to acquire properties between now and 2021, half of them want to live in the central neighbourhoods of the island of Montreal.
This is a real change in the real estate sector, since a few years ago, the massive youth movement was moving towards the suburbs. This observation confirms the idea of a new downtown Montreal, which is being overbuilt to meet the growing demand for real estate investment in the Greater Montreal area.
Do young people know how to access property quickly and economically?
The Toronto-Dominion Bank’s survey of Generation Y youth suggests not! In fact, 55% of them are unaware that there is a quick and economic system for buying a property: the Home Buyers’ Plan (HBP).
Developed by the federal government 25 years ago, the HBP, while very useful, is still not well known.
If you contribute to an RRSP, the HBP allows you to withdraw up to $25,000 and use it as a down payment to purchase a property without having to pay tax on the amounts saved. The total amount used for the down payment must then be repaid at a rate of $1,000 per year. This is an easy way to make a forced, profitable and instantaneous saving, because it is used to invest in a future property!
The PAR-ready system is another convenient feature of the HIP. Even faster than the standard HBP, it involves borrowing a certain amount from the bank and setting it aside in an account for 90 days. With this amount, you will receive a tax return that you can use as a down payment. As with the regular HBP, the loan requested from the bank must be repaid at a rate of $1,000 per year.
These two HBP systems can be combined, but before committing to real estate transactions, it is best to take a look at your notices of assessment, consult your bank, a mortgage or real estate broker who will be able to guide you through the process.
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