As a Real Estate Sales and Marketing firm, we spend some of our time educating first time buyers about the home buying process. We find that the greatest amount of hand wringing arises not about location, or interior features, or even amenities. Trying to make many micro decisions cloaks the greatest uncertainty of all: when the buyer will be mentally and emotionally ready to make the purchase decision.
The mantra that buying a home is often the largest financial decision you’ll make in your life remains true. The first step tends to be the hardest — and first time buyers are the most hesitant when it comes to making a decision. We are inundated with world news and economic statistics, and it all boils down to one principle: change. Change is all around us all the time. Amidst change and uncertainty, it can be especially hard to feel confident when placing so much of your life savings into one asset.
But a home is unlike any other savings vehicle available. A home is your shelter. It’s a gathering place for your loved ones and your cherished possessions. It’s where you rest and rejuvenate. And, once you own, you begin building equity in a housing asset and become a part of the housing market. Even if housing values decline in five years, you may be able to realize greater overall savings when you trade up to a larger property that has also seen its value decline. If housing values appreciate, you’ll have realized capital gains in addition to having more savings to show for yourself.
Over the long term, the economy grows, and the value of most investments increases. A home is not an investment decision that you should try to time with overall market conditions. Rather, buying a home is a deeply personal decision that needs to suit your financial abilities and your lifestyle. If you find a home in a great neighbourhood with amenities nearby, that’s a size that you can live with (it’s a bonus if you need to clean out clothes and possessions you no longer need!), that has a layout that suits your everyday habits, and if you are making a financially prudent purchase within your means from a reputable developer, then you will have made an excellent financial decision. You will be a part of the housing market, and every mortgage payment you make will go towards both the roof over your head today and your savings tomorrow.
