Home Month and Year March 2022 Getting on the Property Ladder as a Young Professional

Getting on the Property Ladder as a Young Professional

Hope for those staring at the first rung of the ladder


Owning property and their own home is a dream for many people, and despite some ebb and waning in the real estate markets, there are always opportunities available for those looking. Young professionals that have started to secure their finances may decide to jump on the property ladder and purchase their first home, and with the proper professional advice, they can learn to invest responsibly.

In order to get an insightful look at the real estate market in Edmonton recently, REALTORS® Association of Edmonton representative, Paul Gravelle, 2022 Chair of the Board of Directors, provided us with some valuable information. “As far as the Greater Edmonton Area (GEA), the REALTORS® Association of Edmonton recently presented our Annual Housing Forecast for 2022. We expect overall residential sales to slow in comparison to 2021, however we still anticipate strong demand in the Edmonton region for the coming year.”

Continuing, he notes, “We know that the Edmonton area is one of the best places in Canada when it comes to affordability and opportunity for young families. Our unemployment rates have continued to drop post-pandemic, and the region boasts a strong, competitive job market in need of talent. Our population in the GEA also has a demographic advantage for real estate, with many residents ranging between 26-46 years of age. The concept of home ownership and raising a family is more affordable here than many other Canadian cities.”

Gravelle mentions, “According to a report by Edison Financial1, Edmonton is the #1 hotspot in Canada for Millennials when it comes to homeownership opportunities. This market has a combined total of 51 per cent of homeowners between the ages of 20-39. Edmonton has the third highest overall number of mortgages per consumer and one of the highest rates of homeownership amongst older Millennials, roughly 1.6 times more than Toronto and Vancouver.”

Understanding the real estate market and having the best chance of discovering what they truly need, a young professional should be seeking professional advice. Gravelle gives strong reasons for seeking a Realtor. “Particularly for busy young professionals, having an experienced professional to navigate the process is always recommended. REALTORS® can offer advice and knowledge while assisting in finding the right first home. It is also critical for young or first-time home buyers to work with a financial or mortgage specialist to assist in planning, budgeting and understanding the financial implications of homeownership.”

Gravelle explains further, “When consumers are making one of, if not the largest investment of their lives, I think it’s always best to have someone experienced by your side. REALTORS® are licensed professionals and are regulated through every province in Canada. As professionals, we are obligated to provide our fiduciary duties to all our clients. We also have a deep understanding of the regional market, and this knowledge is key to being able to negotiate a deal for our clients.”

Realtors are trained to understand needs, Gravelle reiterates. “Having someone who understands client needs is also a huge factor in navigating a first-time purchase. For example, does your home need to give you access to public transportation, or do you need easy access to health care facilities? Do you plan to have children, and have you considered schools? What about your commute – is the length of your commute a factor? Negotiation is also another vital skill that Realtors are experienced in and can offer counsel on how to navigate a deal in high stakes situations.”

Financial security is important to any young professional when it comes to preparing for their first property. We spoke with First Foundation, an Alberta based financial, insurance and mortgage planning firm with goals that include helping clients own property, grow wealth and protect what’s most important to them. Speaking on their behalf was Tyler Pfeiffer, CPF.

Pfeiffer provides some information for young professionals when it comes to investing in their first home. “Be prepared. Make sure that your finances are in order and you are prepared for a home purchase. Get a mortgage pre-approval so that you know the amount of mortgage you can qualify for and have a mortgage ready to go. In a competitive purchasing environment, this will allow you to have a very strong offer since you know that your financing is in place. Have a buffer; allow for extra costs for the home purchase like utilities hookups, taxes, legal and other closing costs.”

Pfeiffer also gives us information on programs available to all potential property buyers. “The RRSP First Time Home Buyer’s Program (HBP) may be helpful. This allows you to withdraw up to $35,000 from your RRSP for a first time home purchase. You don’t have to justify the use of these funds so they can be used for anything that you need. If you are buying a property with a partner, you can each use the program. The funds need to be recontributed to your RRSP over the 15 years after you utilize the program. Another great way to build funds for a purchase is a Tax Free Savings Account (TFSA). “

Before and after securing a first home, solid financial planning is key. Pfeiffer explains options available. “Many people are choosing to keep their first home as a rental property and purchasing a second home. This requires enough cash flow to support both mortgages and adds more risk. Another big decision is what type of mortgage to choose, variable interest rate or locked-in. A great mortgage broker can help you with this. Buying a home is great but it should be a part of a long-term wealth building plan. We encourage people to have wealth in several different asset classes to take advantage of various wealth building strategies.”

Buying habits change over time, and with the recent COVID-19 pandemic, work-from-home became popular amongst young professionals in particular; and that changed what they were looking for in their first home. Gravelle provides additional information. “Over the last several years there has certainly been a push on certain styles of homes in which buyers are interested. Many buyers have been looking for that extra bedroom or office – a designated space that could be flexible for various uses or needs (remote learning, work from home, a recreation or exercise space, etc.).”

Pfeiffer also mentions habits that include choosing communities just outside of Edmonton. “People are looking for space, value, proximity for all family needs and are definitely looking at exterior communities as it has it all right there. And now with hybrid office/home or full home work opportunities it’s happening in real time right now. Of course, we don’t know how long the “working from home” stage will last but I’m hearing a lot of companies planning on continuing the practice once we are through the pandemic.  Employees are preferring the option and many companies are going to stick with it, or at least a hybrid system of a limited number of days in the office.”

Gravelle concludes, “There are plenty of options out there, and experienced professionals that are truly invested in helping you navigate each step of the process! Whatever the case, our members of the REALTORS® Association of Edmonton are well versed in our clients’ needs and we recommend finding an expert you trust to help you through your largest investment.”

1Homeownership Study: Canadian Cities With Highest And Lowest Millennial Homeownership, Edison Financial: https://edisonfinancial.ca/millennial-home-ownership-canada/, article date: September 16,2021, grabbed: January 28, 2022