Toronto Condo and Real Estate Blog

Canadians voicing “buy now rather than later” preference

TORONTO, March 6, 2007 — The possibility of mortgage rates rising in 2007 seems to be of much less concern across Canada, according to RBC’s 14th Annual Homeownership Survey. In fact, over half (57%) of Canadians believe mortgage rates will drop or stay the same, compared to 31% last year. The RBC poll also reveals that 49% of Canadians are less apprehensive about interest rate increases, compared to 44% in 2006.

“When we assess the consumer sentiment being expressed in this year’s study, a picture emerges of confident Canadians weighing their home buying options in a very positive light,” explained Catherine Adams, RBC’s vice-president of Home Equity Financing.

At the same time, while over half of Canadians (59%) believe housing prices will rise in 2007, home buying intentions are holding steady, with three in ten Canadians (28%) planning to buy a house over the next two years.

As for the value Canadians place on home ownership, the vast majority
(90%) think purchasing a home is a good investment, according to RBC’s poll. As well, the percentage of Canadians who estimate that the market value of their homes has increased by 50% or more over the past two years, has doubled since last year’s survey (11% compared to 6%.)

“It’s clear an overwhelming majority of Canadians believe purchasing a home is a good investment. In fact, the average Canadian estimates their home has increased by 22% in the last 2 years,” Adams added. “And the ‘buy now’ message is coming through loud and clear across all age groups - from 25 through to 55 plus.”

Of those Canadians planning to buy a house within two years, an increasing number are looking at a shorter purchasing window. Over half (58%) of all Canadians are saying buy now, don’t wait for next year. Forty-four per cent (up from 37% in 2006) are looking at buying within the next 12 to 18 months.

RBC Homeownership Survey 2007 Details

Regional differences
Focusing on very likely to buy intentions, BC, Ontario, and the Prairies are holding steady from last year, but the numbers have softened in other regions with Alberta going from 18% to 12%; Atlantic going from 14% to 10%.

Renters and owners
Of Canadians who plan to buy a house within the next 18 to 24 months, 62% are renters and 48% are owners. Within the shorter timeframe of the next 12 months, owners outnumber renters, 27% to 18%.

Housing type preferences
Detached homes continue to be the housing type of choice for most Canadians who are likely to buy a home in the next two years - 72% voiced this preference. Condominiums were preferred by 10%, down from 12% last year. Semi-detached homes were cited by 7%, up from 4% in 2006. Townhouses fell to last choice, named by 6% of Canadians planning to buy in the next two years, down from 8% last year.

More Canadians thinking “small” for next home purchase
Desiring a bigger house continues to be the most popular reason for an upcoming move, cited by 48% of Canadian home owners who are planning to purchase a home in the next two years. However, an increasing number are now saying they’ll be looking for a smaller home - 33% compared to 20% in 2006. Eighteen per cent responded that they’ll be considering a home about the same size as their present one.

Gently used tops newly built
Of Canadians planning to buy a house in the next two years, more are likely to buy a resale home (77%) than a newly-built home (23%). This compares to 74% who favoured resale in 2006, and 26% who preferred a newly-built home.

(These are some of the findings of an RBC poll conducted by Ipsos Reid between January 18 and 22, 2007. The online survey is based on a randomly selected representative sample of 2,404 adult Canadians. With a representative sample of this size, the results are considered accurate to within ±2.0 percentage points, 19 times out of 20, of what they would have been had the entire adult Canadian population been polled. The margin of error will be larger within regions and for other sub-groupings of the survey population. These data were statistically weighted to ensure the sample’s regional and age/sex composition reflects that of the actual Canadian population according to the 2001 Census data.)

RBC is the largest residential mortgage lender in Canada with more than $109 billion in loans outstanding at the end of 2006 and over 15.% of the Canadian mortgage market. As the country’s number one source of financial advice on homeownership, RBC conducts consumer surveys as one way to provide insight to Canadians about the marketplace in which they live.

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March 6, 2007 — Toronto Real Estate Board Members reported 6,772 sales in February, an increase over February 2006 (6,756 sales) and the second best total for this month ever recorded, Toronto Real Estate Board President Dorothy Mason announced today.

“While the weather last month may have been cold, Toronto’s real estate market remained hot,” noted Ms. Mason. “And while it is too early to make predictions, it is clear from the start of 2007 that the spring season is likely to produce sales numbers at east comparable to those of the past several years, which have been record or near-record performances.”

Meanwhile, average prices climbed 4% over the previous month to $368,687 as sales activity accelerated. They were also up 4% from the February 2006 figure of $353,928.

The average time-on-market was a torrid 35 days.

Breaking down the totals:

2,522 sales were reported in the 28 West districts and averaged $342,060

1,224 sales were reported in the 14 Central districts and averaged $504,381

1,395 sales were reported in the 23 North districts and averaged $389,306

1,631 sales were reported in the 21 East districts and averaged $290,392

Neighbourhood Corner - Unionville

So far this year, 10 of the 14 sales in Unionville (part of N-11) were of detached homes. These averaged $641,390, up 22% over the $523,188 recorded during the first two months of 2006.

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March 6, 2007 — Toronto real estate activity in the month of February was slightly higher than a year ago, Toronto Real Estate Board President Dorothy Mason announced today. A total of 6,772 transactions took place in the month, as compared to 6,756 in February 2006.

“Sales activity has been strong to begin the year,” Mrs. Mason said. “Results from the first two months show that so far 2007 is five per cent ahead of last year’s pace.”

“The important thing is that we are seeing strong results on a consistent basis, which speaks volumes about the stability of the market,” Mrs. Mason added. “As we head into the most active part of the year, it’s an excellent time to get into the market for the first time or make a switch to a different home.”

In Scarborough Town Centre / Woburn (E09), a jump in sales of detached homes pushed overall activity up 22% compared to February 2006.

Strong condo apartment sales in Mimico / New Toronto (W06) contributed to a 29% increase in overall transactions compared to a year ago.

Central Toronto’s Davisville neighbourhood (C10) saw 20% more transactions than the same month a year ago, with strong sales among most housing types.

North of Toronto in Newmarket (N07), detached homes were the most popular type as transactions increased 32% compared to last February.

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