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President's Toronto Star Column

TREB President's Column as it appears in the Toronto Star.

Home Ownership Can Be A Formidable Challenge

June 6, 2012 -- Data from Canada’s most recent 2006 Census shows that more Canadians own their home than ever before and like many of you, Greater Toronto REALTORSĀ® believe in the many benefits of home ownership.

Achieving this milestone can be a formidable challenge for many people though, as the current economic times make it more difficult to come up with a down payment and requirements to qualify for mortgages continue to increase.

As well, there are added closing costs to consider, like the Harmonized Sales Tax and the Land Transfer Tax, which can significantly diminish affordability. Since they cannot be financed, home buyers must allocate funds, which could otherwise be used for a deposit, towards such closing costs. In turn, a more modest down payment reduces what home buyers can afford by limiting the amount they qualify to finance and increasing mortgage payments.

Fortunately, down payment loans are available to help low and moderate-income earners buy a home. In doing so, they improve lives, helping home buyers build equity, upgrade the quality of their housing and achieve financial stability, often with carrying costs that just as affordable as renting. Helping others achieve home ownership can also translate into one less person in social housing or on a waiting list for such housing.

Since 1992, the City of Toronto, using federal and provincial funding, has worked with six non-profit partners to produce 1,143 affordable ownership homes, from detached houses to condominium units, in 22 of Toronto’s 44 wards.

A recently released study that examined the last five years’ results of the City’s efforts to facilitate affordable home ownership with its non-profit housing partners offers tremendous insight into the importance of such initiatives.

The study - the first of its kind in Canada - was based on a recent survey that targeted 215 respondents who were renting before they received government financing, or indirect support through a partner organization’s financing, to purchase their current home.

Almost three-quarters of respondents who received such assistance said they would have been unable to buy without it. This strongly supports the view that a down payment is a major barrier for low and moderate-income home buyers, and that down payment assistance does help.

The numbers also show that an overwhelming majority have found home ownership to be a positive experience: Some 78 per cent of respondents were even more satisfied with their home than they expected.

Among the highlights of home ownership that respondents cited were the ability to build equity, achieve greater financial stability, and enjoy higher housing quality.  They noted positive changes with respect to personal privacy, physical health, personal safety and even their children’s school performance.  This shows that home ownership has significant effects that are beneficial on a very broad scale.

Moreover, 43 per cent of respondents intended to improve their homes with an investment of more than $5,000 in the next five years, further producing positive widespread effects.
Greater Toronto REALTORSĀ® applaud the efforts of the City of Toronto and its six partner organizations.  Recognizing the important role that affordable housing also plays in relieving pressure on the rental market and providing affordable housing stock, government policies and incentive programs should continue to support home ownership. Doing so builds a better city for all of us to enjoy.

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