Many Canadians have reached a new kind of poor – House Poor
When we look at the increasing cost of living in Canada, and especially in Toronto, it’s not a surprise that over 30% of the population (and especially the younger generations) are house poor. House poor refers to a new kind of poor – but a poor that is increasingly becoming more and more normalized. House poor means when you spend over 30% of your income on your house and utilities. Is it even possible to live below that, realistically in Toronto? The answer for the most part is no.
Housing costs have increased. Utilities are through the roof. It makes sense that many Canadians are now House Poor – because unless they become CEO’s or win the lottery – this trend only threatens to increase.
It is important to understand what costs you can afford, before you make a final decision. Sometimes this means cutting back on luxuries in life, until a balance can be met that allows you to live comfortably, and not in mega unmanageable mortgage debt.
One of the reasons why this has happened is due to the increase of DIY real estate. Taking on everything from A to Z when buying a home without experience will surly lead to things being overlooked, or bad decisions being made. One way to avoid this seemingly growing trend is to consider speaking with professionals prior to making any big decisions. Banks may offer you large mortgages that in theory, the payments are affordable. However, are you just meeting the minimum? Or do you have room to move?
Financial planners can help you determine what you can really afford, so that you don’t become a negative statistic. Laying out household costs that can include everything from condo fees, to transportation to children to determine where cuts can be made – if any. There is real value in seeing things in black and white, and being able to see them for what they are prior to decision-making time is essential in making the right decision.
Real estate brokers can also help you find a home that is suitable to match your actual budget. There are locations and options that only brokers have access to, and this could be the key to not becoming house poor. They also know about the different options out there, from pre construction to pre owned, to whatever the next trend may be – with you as their client, you can be sure they will help you as much as they can.
Regardless of the statistics, Canadians are becoming more financially aware, and are realizing more and more the need for a financial plan, and the importance of managing debt. It is something that unfortunately for many and for most, is unavoidable, but with the right planning, and the right help, resources and information, can be manageable. Let me help you avoid the house poor trend, and live comfortably and happily in something that is just right for you.
The condo market in Toronto is booming, and pre-construction condos are always something that is worthy of an investment. Contact me today and let’s chat!
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