Category Archives: First Time Buyers
Daniel Tencer – The Huffington Post Canada
If you’re a first-time home buyer trying to get into the market, you probably get knots in your stomach when you hear a single-family home in Toronto now averages more than $1 million, or that Vancouver’s housing market is even more insanely competitive following a 53.7% hike in sales last month.
But those numbers reflect all the buyers in the market, from wealthy investors speculating on land to Baby Boomers upsizing to luxury homes. For the first-time home buyer, things aren’t quite that daunting. Not yet, anyway.
Private mortgage insurer Genworth Canada has put out a survey showing what first-time home buyers are paying in different parts of the country, and not surprisingly there are some big variations.
One surprising result is that Torontonians are paying more — slightly more, but more — than Vancouverites for first-time homes. The median price of a first home in the Toronto area was $425,000 in Genworth’s survey of 1,800 Canadians, versus $420,000 in the Vancouver area. This despite Vancouver having the second-least affordable housing market in the world, by one measure.
Comment: And that measure must be wrong. Think about New York, London and Hong Kong. For Vancouver to be 2nd, it would have to be more expensive than 2 of those cities. Does anyone really think Vancouver real estate costs more than New York AND London?
The survey generated instant accusations of hypocrisy against Genworth, as it concludes that first-time home buyers “are doing their homework and making responsible financial decisions entering the housing market.” But just days ago, Genworth hiked its mortgage insurance rates by 15% for home buyers with small down payments.
The survey “appears to contradict its latest move to increase costs for those same buyers,” Mortgage Broker News wrote.
Comment: How? If first time buyers are saving money, buying homes and not defaulting on their mortgages, then they are “are doing their homework and making responsible financial decisions entering the housing market”.
Indeed, the survey found that the average down payment for a first home is 12% nationally. It falls as low as 8% in Atlantic Canada. In Toronto and Vancouver, where down payments average 21 and 20%, respectively, buyers are getting help from parents more than in other markets, Genworth said.
Comment: And if people are putting down 20% or more, then that is proof of first time buyers being financially responsible. They are getting conventional mortgages and avoiding the mortgage insurance altogether.
And the survey appears to confirm what many suspected: First-time home buyers today are wealthier than average.
Nearly a third of first-time home buyers in the survey had a household income above $100,000, the survey found. In Toronto, 40% of first-home buyers had an income above $100,000, followed by Calgary at 39%. That falls to 24% in Montreal and 21% in Atlantic Canada.
The survey of 1,800 Canadians was carried out by Environics between Feb. 5, 2015, and March 4, 2015.
Contact Laurin Jeffrey for more information – 416-388-1960
Laurin Jeffrey is a Toronto real estate agent with Century 21 Regal Realty.
He did not write these articles, he just reproduces them here for people who
are interested in Toronto real estate. He does not work for any builders.