Low interest rates driving home sales on the Prairies
June 4th, 2009By Annie McLeod, Leader-Post
Affordability — not government incentive programs — is the primary factor that influences first-time home buyers in the Prairies, according to a new report by Royal LePage.
In its national first-time home buyers report, Royal LePage said 92 per cent of buyers in the Prairies considered interest rates a factor in their first-home purchase. Low prices were close behind at 88 per cent.
Even though the average sale price of Regina homes is up three per cent from the same period last year, Mike Duggleby, manager of Royal LePage Regina Realty, said the current low interest rates are helping to make homes more affordable. This is bringing more first-time home buyers into Regina’s housing market.
“We were just taking a look at last month’s statistics, and the busiest price range in the city is between $200,000 and $225,000, which is first-time home buyer territory,” he said, noting that the number of sales in that price category are up over 104 per cent from the same month last year.
The report also stated that 55 per cent of first-time buyers in the Prairies considered the home renovation tax credit (HRTC) to be an influencing factor in their first home purchase. The HRTC provides a maximum credit of $1,350 for work performed on, or goods acquired for, an eligible dwelling.
With respect to the first-time homebuyers tax credit, Duggleby said that while the $750 credit is “significant and it’s nice,” it’s a low dollar amount compared to the price of a home and won’t be the determining factor in buying or not buying.
Sales between $150,000 and $250,000 make up the majority of the new buyer market in Regina, said Duggleby. Homes in the Broders Annex neighbourhood, east of the General Hospital, are the most popular for first-time buyers as people are buying and renovating them to make their first property nice.
“It’s more affordable than some other neighbourhoods that have had a lot of renovations done in a lot of houses already,” said Duggleby. “Buying that property that needs a little bit of work makes it a bit more affordable.”
Of the first-time buyers surveyed, more than half planned to purchase condominiums or detached bungalows. First-time buyers make up about 30 per cent of Regina’s housing market, and Duggleby said the majority of them are under the age of 30.
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