The Duke and Duchess of Cambridge have just welcomed a second bundle of joy to their household – and like most growing families, they will be moving their royal brood into a residence with more space. But unlike most young couples, Will and Kate’s new home is a 10-bedroom country house, courtesy of the Queen.
For young, non-royal couples living in big cities, condo living often meets all needs — adequate space, amenities such as fitness facilities and security, central access and low maintenance — until babies arrive and more room is needed. A detached house is the next logical step but with prices skyrocketing in hot urban centres like Toronto and Vancouver, homes are largely still out of reach financially.
A recent Scotiabank poll found that 41 per cent of Canadians would move to a new home with more space if they were expecting another child, while 25 per cent said they’d renovate their current residence to add or make better use of space.
Also read: Why Your Starter Home May Be Your Only Home
Not Enough Room For A Nursery
According to a Globe and Mail article from earlier this year, 29 of the then 93 condo projects in development in Toronto had three-bedroom units. These larger units seem perfect for a young family with two children but, according to that same article, many of the three-bedroom condos currently available in Toronto have bedrooms that are much too small and wind up as rental units to young and single roommates.
That doesn’t mean that condos are out of the question for families: smart renovations can help provide more functional space and some condo developers have plans to add kid-friendly amenities that take some of the heavy lifting away from the units themselves.
However, a detached home in the city is just a dream for most young families, with low supply and average prices in Toronto coming in at over a million dollars. Semi-detached and townhomes may be an attractive option; the average price of a semi-detached Toronto home was $727,875 in April and for townhomes, the average price was $551,23.
Making the Most of It
So, what’s a young family to do?
“Before any major decisions are made, it is important to meet with a financial advisor to ensure you get the right financing advice to suit your unique goals and objectives while understanding how a new home or condo purchase fits into your overall financial plan,” says Janet Boyle, vice president of real estate secured lending at Scotiabank.
However, moving to a larger home just isn’t a possibility for many young families. Boyle suggests these couples consider their renovation options as a potential alternative, and offers the following tips:
1. Determine whether you need the money upfront, or in stages. Do your research to get a better idea of the size of your renovation. There are suggested guidelines as to which financial products are best suited to different types of renovations. For instance, while renovations less than $5,000 are better suited towards cash or credit card payment (provided you pay your balance monthly), a larger project over $10,000 may require a line of credit or refinancing your mortgage.
2. Tap into your home equity. A cost-effective option that homeowners may not be aware of is using a home equity line of credit to help finance a renovation. This allows you to use the equity that you have built up in your home. Depending on the amount of equity available to you, you may qualify to borrow up to 80% of the value of your home.
3. Talk to your financial advisor. Once you’ve done your research to determine the size of your renovation, talk to your financial advisor to learn about all of your financing options and a renovation fits into your overall financial plan. Since every homeowner’s financial needs are unique, it is best to ensure that you work with a trusted advisor every step of your home renovation journey.