Brokers, it may be time to check in with those young clients you helped into a condo five years ago. Dollars to donuts, they're now looking for houses and the kind of long-term mortgage that spells big bucks for brokers.
“They are telling me they want a 5-, 7- or even 10-year fixed mortgage,” says Bruce Flanagan, Premiere Mortgage Centre. “These young families are very specific; they are fuelling the renaissance in the Ossington, Dufferin Grove, the Junction… the baby has arrived, and they need space for the child and all the toys.”
With rates at historical lows, the ‘Y’ Generation – also known as the Millennial Generation (20 to 30 year olds), are moving out of their condominiums and into those rejuvenated downtown neighbourhoods.
“You can find a house now (in Toronto) for $400,000 - $500,000 now. That is the big trend – people wanting to cash out of their condos,” says Flanagan. “They are having kids, growing up. They want to buy homes, with space – with a yard.”
The combination of low interest rates, more affordable housing rates within the city and the 20- to 30-year-old demographic are creating a perfect storm of young families looking for long-term mortgages.
“If you can get a 3.79 per cent mortgage on a 10-year term, why wouldn’t you?” asks Flanagan.
And Flanagan is finding that one mortgage deal quickly turns into others.
“I finished a deal with one client and I meet five more very quickly,” he says, as the young families have friends in similar situations – a baby on the way and looking to trade their condo for a house.
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