Singles guide to home buying
The number of single-person households continues to rise, according to the most recent Statistics Canada population survey. Its 2011 census found that "for the first time, (there are) more one-person households than couple households with children."
This trend is echoed worldwide where single people are increasing across the globe.
According to market research firm Euromonitor International Ltd., even the Arab Emirates report 60 per cent of women over age 30 are unmarried, up from 20 per cent in 1995.
In Canada, Statistics Canada reports that "the proportion of one-person households increased from 25.7 per cent to 27.6 per cent (since 2006) of all households, continuing an upward trend."
This trend has economic implications as evidenced in the real estate market: there are more small condos under development in urban areas and more single people buying homes.
Better than renting for young buyer
Toronto resident Tom Grinnell, 28, is one of these first-time buyers. With a large down payment ("I started saving when I was in elementary school and had my first job at 15," he says), Grinnell, a social worker, made the leap from renter to owner two months ago. He bought a two-bedroom condo for less than $300,000 making it one of the more affordable properties in the city.
"Rent is expensive in Toronto and instead of giving away $12,000 a year to pay someone else's mortgage, I thought why not pay myself instead. My mortgage is less than my former rent and it's a much nicer, larger place."
While Grinnell isn't typical in that he has a substantial amount of down payment (he prefers not to disclose the actual amount), he faces the same risks as other young single homebuyers. Gary Siegle, regional vice president with Invis mortgage brokers in Calgary, says that singles may have no fallback if they lose income for a period of time through job loss or illness.
"There is no discrimination on the part of lenders toward single applicants," says Siegle. "Years ago if a couple with two incomes applied, only half of the spousal income was considered. That's not the case today. Income is income."
Down the road
That said, there are some points that singles, especially those buying after renting, need to consider. These include:
- Think about all future repairs and maintenance that might have previously been covered by a landlord. If you're single, you'll either have to learn how to do these on your own, or pay to hire someone.
- Have a contingency plan and savings should something happen to your income.
- If you're counting on informal rental income as a backup, be aware it won't be considered in terms of qualifying for a mortgage or equity loan.
Financial planner Lyle Karasick, senior consultant with Investor's Group in Vancouver, says the biggest concern with single purchasers is "they must keep a large reserve because they have no other income to fall back on."