Money Tips Monday: Entering the Okanagan’s real estate market

If you’re like most of us, money management is a bit of a mystery.

That’s why Global Okanagan has teamed up with Valley First to bring you Money Tips Monday.

Once a month, we will seek out information from the experts at Valley First on a number of topics, and try and make dollars and sense of it.

In the first installment of the new series, we look at the hot-button topic of renting versus buying in today’s tough market.

Both have their pros and cons, but what we find out is that it’s more important for first-time homebuyers to have a plan in place when it’s time to enter the real estate market.

In our first installment of Monday Tips Monday, we have some sound financial information from experts on making the transition from renter to new homeowner.

“It’s extremely hard to get into the housing market here in the Central Okanagan, just because of the number of people moving here,” said Steve Wright of Royal LePage.

That’s not just here in B.C.’s Southern Interior — it’s a situation playing out across the nation.

According to the Canadian Real Estate Association, the average price for a house in Canada was $700,016 in April, up $100,000 from last year.

Combine that with record inflation, and skyrocketing mortgage rates, and you have a nightmare scenario for those looking to own a home.

So much so, in fact, that many young Canadians have resigned themselves to remaining renters.

However, by changing the traditional idea of a first-time home, experts say some first-timers are managing to get into a tight market.

“Well, they’re making the adjustment by not buying a single-family home,” said Wright. “So they’re downsizing to a townhouse or, if need be, to a condo.”

That’s exactly how Dave and Elsa Korzinski became first-time homeowners last month.

“I think we would have loved to have that dream house; three bedrooms, a big yard, fence for the dog,” said Dave Korzinski.

“What we ended up in is a nice townhouse with a 12-by-4 yard with some astroturf.”

Now, though, instead of paying someone else’s mortgage as a renter, the Korzinskis are building equity in their first home.

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But what’s right for you?

“Renting versus buying, it’s really a personal decision,” said Jassie Kakoschke, manager of the Valley First branch in Rutland.

“But the most important is getting yourself in a position where you can be a first-time homeowner.”

Kakoschke, who’s been in the banking industry for two decades, has this advice for people looking to get into the real estate market.

“My No. 1 tip is to start saving, whether it’s an RRSP or a tax-free savings account,” said Kakoschke, “because demonstrating a pattern of savings will help you establish your credit rating, which is tip No. 2.

“You want to have a strong credit history. And that savings account is going to help show a lender that you’re going to be able to repay that debt.”

Kahoschke’s third tip will help avoid home buyer heartbreak.

“Make sure you get preapproved for a mortgage before you start shopping. You want to make sure you can afford that home you fall in love with before you have to make an offer.”

For those of you who already own a home and are looking to help your children, Kakoschke says some might consider gifting a down payment or co-signing the mortgage.

“What you want to do is ensure you’re talking to your financial advisor to make sure it’s the right thing for you and your financial future.”