PropertyWire.ca
It seems that first time homebuyers are rushing to market, spurred on by the knowledge that interest rates have nowhere to go but up- and that they are set to rise sooner rather than later.
Although predictions for a rate hike this spring seem to indicate that rates will stay where they are in the short term- mostly because of the May election, there is no denying that eventually they will go up- and that there are very real implications on affordability and mortgage payments- something very prominent in the minds of first time homebuyers.
A recent report from RE/MAX that examines trends in 19 Canadian centers, houses in lower price points are getting snapped up. 30% of the markets surveyed reported an increase in sales over 2010, and 70% have reported steady upward movement in prices.
According to the RE/MAX First-Time Buyers Report, the West is leading the way: “With an average price hike of close to 20% year-to-date (February), Greater Vancouver continues to show unprecedented strength, followed by Hamilton-Burlington (eight%), Quebec City (seven%), Winnipeg (close to seven%), Greater Toronto (five%), and Greater Montreal (five%). ”
“Despite homeownership rates approaching 70%, there is clearly room for growth as entry-level buyers make their moves from coast-to-coast, undeterred by higher housing values and changes to lending criteria” says Michael Polzler, Executive Vice President, RE/MAX Ontario-Atlantic Canada.
“There has long been an issue with this generation’s first time homebuyer, in terms of expectations in what a first home would look like.” First time homebuyers have typically had much higher expectations than in the past, and have expected larger properties with more amenities and convenient locations the first time around.
However, the findings in this RE/MAX report suggest that there may have been a shift in first time homebuyer attitudes, and that expectations towards property ownership are beginning to mirror those from generations prior. “Many purchasers intent on realizing homeownership is scaling back on expectations or are willing to sacrifice location, quality and/or size to make their dream a reality – not unlike generations before them, “says Polzler.
Inventory, in most centres is balanced as well, and is giving first time homebuyers lots to choose from. Also, according to the report, consumer confidence is higher.
It is not just the first time home buyers’ attitudes that have changed; so have those supplying the product. According to the report “No one is more in tune with that than housing planners and developers. In fact, the growing demand for reasonably-priced product is creating a shift in the country’s housing mix. That trend is expected to gain traction in coming years, as builders look to create greater options for those seeking to realize homeownership.”
The report also indicates that the complexion of the first time homebuyer has changed as well- “a greater percentage of today’s first-time buyer pool is comprised of dual-income, college or university-educated couples with solid earnings.”
Speaking exclusively to Propertywire.ca, Vancouver Sales Agent Jay McInnes with Macdonald Realty, who works extensively with first time homebuyers, says that he had not seen a great deal of change in terms of expectations:” all in all there has really not been a huge shift in general points of view that I have seen in first time home buyers in Downtown Vancouver.”
“The majority “in general” of all first time home buyers say they want all of the amenities to be within their buildings, but at the end of the day do not want to pay for it. This is usually the first thing that gets taken of the “Must Have” lists of first time buyers as they realise that that is only growing their monthly overhead (strata fee) and is really not necessary.”
“Location is a typically more straight forward. Buyers do a lot of research themselves these days as there is so much available information on the net… I rarely have to direct Buyers in the topic of location. Some will ask what my thoughts are for the best areas to invest, but outside of that for the most part, they know where they would like to live. It’s just a matter of finding the product they can afford in the desired area.”
————————————————————————————————————–
Contact the Jeffrey Team for more information - 416-388-1960
————————————————————————————————————–