Family Formation & Housing

For young couples starting families, buying their first home and/or other real estate. Covers mortgages, credit cards, interest rates, children’s education savings plans, joint accounts for couples and the like.

Are high rent costs a hurdle to Condo ownership?

Posted By |

By Penelope Graham, Zoocasa

Special to the Financial Independence Hub

The rising cost of rent in markets across Canada has become an especially prevalent issue in recent years, as a sharp lack of supply and steep real estate prices put the squeeze on home seekers’ affordability.

The fact is, rising ownership housing values, exacerbated by the federal mortgage stress test, have kept more would-be home purchasers in the rental market for longer; a total of 31% of first-time buyers say they rented for at least a decade before buying their first home, according to a recent Canada and Mortgage Housing Corporation report.

As well, new data from Rentals.ca reveal steadily rising rent costs in Canada’s major markets: up 0.7% in Vancouver to an average of $1,987 for a one-bedroom, while Montreal unit costs rose 8.1% to $1,285. In Toronto, such a unit went for $2,262 in the third quarter of 2019, according to the Toronto Real Estate Board.

A look at one of Canada’s most expensive rental markets

With more Canadians remaining in higher-priced rentals for longer, could these overall higher shelter costs be crimping their ability to eventually move up into the ownership market?

To see whether high rental costs are limiting Canadians’ homeownership options, Zoocasa conducted a study in Toronto, one of the nation’s priciest markets, to determine the rent-to-homeownership-cost ratio in the city. The study sourced average sold prices for condo units in 35 neighbourhoods across the 416 region, as well as the average lease rates for condo rental apartments in each. It also crunched the minimum down payment required to buy a unit in every neighbourhood, as well as the equivalent number of months of rent.

The rent-free possibilities

The findings essentially reveal just how long it would take to save a condo down payment in each neighbourhood, if the saver didn’t also have to pay any rent; while this may seem a dream scenario for many of the city’s dwellers, it could be a possible approach for the 47.7% of young adults StatsCan says still live within the family home in the city. The numbers also illustrate the minimum financial cost required to own a home in each area, as well as how feasible it would be to make the jump from renting to owning.

For the City of Toronto as a whole, the numbers aren’t too daunting; in order to purchase a condo unit in the city at the average price of $628,074, savers would need to amass a down payment amount of $37,807. Doing so would take a rent-free individual 14.7 months if they didn’t need to pay the city’s average rent of $2,567 monthly. The good news is, there are a number of affordable locales where a buyer could break into the market much faster – within a year in a total of 13 neighbourhoods.

In exchange for this affordability, though, buyers will need to give up their ideals of a central location and convenient commute; the majority of these neighbourhoods are located on the eastern and western edges of the city, with less direct access to public transit route. Continue Reading…

5 apps to help get your personal finances on track

Posted By |

By Julia Faletski (Sponsor Content)

For many people, managing your money means simply checking your bank account every month and paying your bills. That’s a great starting point. But if you want to get on a strong financial footing and maybe even retire a millionaire, you’ll need to set goals and have a plan for how to get there. That means budgeting, saving, building a strong credit score, and more.

Fortunately, today’s technology means you don’t need to be a math wiz to make these smart money moves. In fact, you don’t even have to look at a spreadsheet. There’s an app for that.

To help you get started, we’ve curated a list of apps that will help you automate —  and dominate — your personal finances:

Budgeting

To start out your financial journey, you’ll want to know how you’re doing today. Budgeting is probably the most fundamental aspect to personal finance. There are lots of budgeting apps out there, but Mint is one of the more well known ones for a good reason. Mint allows you to manage your finances from beginning to end: you’re able to link banks accounts, credit cards, investment accounts (like WealthBar!) and bills. You can track your spending, create a budget, and see a complete picture of where your money is going, all in one place. It’s great for both keeping track of your day-to-day transactions and long-term goals.

If you want more of a step-by-step guide to creating and following a budget, take a look at You Need A Budget (YNAB). Not only are you able to link accounts and track expenses, but you can also get advice on how to pay down debt, manage monthly expenses, and accumulate savings. It’s always a bonus when a company infuses their features with financial education. Knowledge is power!

Taxes

We get it, tax season probably isn’t your favourite time of the year. Luckily, apps like TurboTax aim to make filing your taxes painless. The app will take you through a number of easy-to-answer questions — prompting you to provide the pertinent information — and then it will do the calculations for you. No need to go through all the tedious steps yourself! The goal is making sure no money is left on the table in unclaimed deductions.

Credit score

Having healthy credit goes a long way when you need to borrow money for a big purchase like a house or even get a credit card. Credit Karma allows you to take the guesswork out of understanding your credit score. They make it easy to access your credit rating for free, understand what is positively or negatively affecting the rating, and see how you can improve it. Continue Reading…

Trick or Treat: How much does the average consumer spend on Halloween?

Posted By |

 

By Mike Brown

Special to the Financial Independence Hub

LendEDU’s third annual study also included price comparison research that found consumers can save a good chunk of money by shopping for Halloween on Amazon rather than Walmart.

 

While our level of involvement may differ, most of us will be taking part in Halloween festivities in some capacity.

For the youth, enthusiasm for Halloween begins in September when costume ideas start taking shape. Once it starts, the fun doesn’t end until the candy-induced stomach ache kicks in roughly three hours after that last Twix.

While young adults may bypass the trick-or-treating, Halloween still offers a great excuse to dress up, look silly, and have a night out on the town.

Adults, who are often less excited than children, play an integral role when it comes to Halloween. Without them, who would chaperon the trick-or-treaters, hand out candy, cover houses in spooky decorations, or design the outfits that win the school costume competitions?

Like most holidays, Halloween will always have naysayers, but for the most part, it is seen as an enjoyable night that kicks off the holiday season. And according to LendEDU’s third annual Cost of Halloween survey, it is actually a day that will be forcing many to cough-up a decent-sized chunk of change.

Average American will spend US$162.29 on Halloween in 2019

With Halloween just hours away, LendEDU wanted to figure out how much families are spending on this holiday characterized by candy, costumes, and scary decorations.

​To do this, we asked 1,000 Americans that were planning on celebrating Halloween in 2019 the following question: “How much do you expect to spend celebrating Halloween this year?”

After averaging together all 1,000 responses, we found that in 2019 the average American is expecting to spend US$162.29 on Halloween. (All dollar amounts below, including graphics, are in US$).

It turns out that all of the fun brought on by Halloween comes at a price that may scare a few people away before the haunted houses even have a chance. $162.29 for a few hours of spirited and spooky celebrations is nothing to sneeze at.

>> Read More: How to Save on Halloween

​So, what is making the cost of Halloween so unexpectedly high? Continue Reading…

How to avoid the hidden costs of school

Posted By |

By Tara Thompson

Special to the Financial Independence Hub

If you have school-age children, you know that when fall rolls around there will be additional costs added to your budget. Hopefully, you planned for this increase in the budget when the school year began, but as we all know there are always unexpected costs that we didn’t think of. Here are a few things to expect as well as a few ways to save.

Clothes

When we send our kids off to school we already know about many of the costs. Back-to-school shopping can be crazy. New clothes are important if we want our kids to fit in with their peers. New shoes are also a popular item and they often need multiple pairs. If you live in an area that has cold weather or rain they will need coats and jackets. If possible try to reuse some of your kid’s clothes. I know they always want new clothes but try to mix in some new with some of the old, and don’t forget to utilize hand-me-downs if you have more than one child.

Supplies

Then there are the dreaded school supplies. A long list that never seems to end and probably a new backpack and lunchbox to go with them. There are ways to save money by finding good sales and also by re-using supplies from the previous year. I keep a plastic bin with unused and used school supplies that can still be used during the year and the following year if I still have them. This saves money and is a good way to be green. Continue Reading…

How Canadians are impacted by rising home prices: National Survey

Posted By |

 

By Penelope Graham, Zoocasa

Special to the Financial Independence Hub

Election season may have come and gone, but the need for affordable housing remains a top-of-mind issue for Canadians, regardless of governing political party. According to a recent national survey conducted by Zoocasa, a whopping 84% say they feel the ability to afford a home is a major issue that’s negatively impacted the population: and 78% feel the government needs to make it a priority focus.

As well, the survey findings reveal that anxiety around affordability extends beyond those who wish to get onto the property ladder; while renters express particularly strong feelings of uncertainty (93%), current homeowners are also feeling the squeeze from spiralling home values, with 80% in agreement.

Let’s take a look at the top concerns indicated by Canadians.

Incomes can’t keep pace with Real Estate prices 

It’s no secret that prices for houses for sale in markets across Canada have seen enormous growth over the last five years. According to the Canadian Real Estate Association, the national average home price now exceeds half a million dollars, at $515,500 (though it should be noted that removing Vancouver and Toronto houses and condos from the equation would trim that total to $397,000).

This has left the majority of Canadians – 91% – feeling as though home prices have outstripped wages in their city or town, while another 92% say they feel rising home prices have reduced the ability of middle-class Canadians’ abilities to purchase a home.

As a result, in order to seek out greater affordability, more than half of first-time buyers said they’d leave their current location and move to a market with lower home prices, contributing to what’s referred to in real estate circles as “driving until you qualify.”

Other homeownership hurdles

But rising home prices only tell a portion of the story: while 70% of respondents agree they’re the largest obstacle to getting on the property ladder, the inability to save enough for a down payment also ranks highly on the list of challenges. Continue Reading…