David Mravyan is part of the growing cohort of millennial-aged tech startup entrepreneurs who are transforming Canada’s economy and real estate sector.
The co-founder of Sensimat Systems, which builds pressure management systems for individuals with spinal cord injuries, bought his first condo straight out of university, renting it out and riding its astronomical appreciation. After spending years renting, Mravyan bought a one-bedroom-plus den condo unit in Toronto’s Midtown late last year to live in—in large part because he didn’t want to risk being priced out of the market.
“(My first purchase) allowed me to build up equity and ride out the wave of appreciation that swept through Toronto and the rest of Canada over the years, and then utilizing a home equity line of credit I was able to gather enough money to put together a down payment for a new place together with some money I saved up. The reason I went that route compared to a mortgage was because of the flexibility a home equity line of credit would allow me, specifically due to repayment flexibility.”
Mravyan added that as a startup operator, cash flow is a nagging wild card.
“You always have a tough month, tough week, tough year even, so by using a home equity line of credit I can smooth it out,” he said. “During tough months, I can pay a little; on months I’ve saved up, I pay a lump sum payment. The other thing is I can utilize some of the equity as a general loan for myself if I need to.”
According to REMAX Integra’s Co-founder and President Walter Schneider, buyers like Mravyan—members of the urban entrepreneurial class who prefer vertical living—are the new normal. The North American consumer profile has changed to encompass households composed of single occupants—in fact, they’re the largest in Canada, with the highest percentage comprised of females—different family and housing types.
“Millennials are very lucrative,” said Schneider. “There are as many millennials as there are baby boomers out there and they’re early in the buying curve. As family formation starts and is delayed, it just changes.”
But it’s unlikely that this urban demographic will want to forever dwell in condos. Schneider thinks that while condos are more popular today than they’ve ever been, life cycles ultimately determine what people buy.
“Their needs are different. They want smart houses and accessibility to transportation. I see a lot of sleepy neighbourhoods in the next 15 years coming to life with people who wouldn’t consider living there today. A 30-year-old today won’t consider a certain neighbourhood, but when she or he turns 45, they will consider it as their needs change.”
Mravyan certainly doesn’t intend to live the rest of his life in his condo.
“I’m keeping an eye on what’s happening in the bigger condo units and detached houses,” he said. “The only way I can make that jump is by liquidating my assets, and as for right now I don’t need that room. But based on what’s happening now, it looks like the condo market is really hot, so I’m riding the appreciation of the condo market because it’s an asset class I own.”
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