Royal LePage released the below article. Let us know your thoughts!
- While Vancouver has higher home prices, first-time home buyers in Montreal are more worried about their down payment (58% vs. 60%)
- First-time home buyers in Toronto had the highest anxiety that their down payment would not stretch enough to buy the home they wanted (68%)
- Of first-time home buyers who lived with their parents before buying, almost one-fifth said that remaining at home delayed parents’ decision to downsize
- Despite higher median home values, Toronto (59%) and Vancouver (54%) respondents are most likely to prefer proximity to work over square footage than new home buyers in other regions studied
TORONTO, May 9, 2019 – A survey released by Genworth Canada, the country’s largest private residential mortgage insurer, in collaboration with Royal LePage, Canada’s leading real estate services provider, analyzed key trends among first-time home buyers who purchased a home within the last two years.
Fifty-seven per cent of respondents nationwide said that before buying their home they worried they might miss out on a property they wanted because of an insufficient down payment. While Montreal’s median home price is one third of that in Vancouver, respondents in Montreal reported being more worried (60%) than respondents in Vancouver (58%). Toronto respondents had the most anxiety (68%).
“While interest rates remain historically low, it is not surprising that first-time home buyers in Montreal are increasingly concerned about their down payment,” said Phil Soper, president and chief executive officer, Royal LePage. “Montrealers have been watching home values escalate over the past three years. Many are wondering if they have time to grow their down payment or if they should get in the market now as prices continue to rise.”
When asked to describe their housing situation before purchasing a first home, 25 per cent of respondents nationwide lived with parents or relatives. Forty-three per cent of those living at home paid rent to their families and of those paying rent, 30 per cent paid less than the market value.
One-fifth of respondents who lived with family said that living at home delayed their parents’ own decision to downsize (17%), while a further 15 per cent said that younger siblings would have to leave the nest before parents can downsize. Sixty-four per cent said their parents had no plans of downsizing when they become empty nesters. These results support findings in Royal LePage’s 2018 Baby Boomer release that revealed although many Boomers still have children living at home, 17 per cent of them are expected to purchase a property by 2023, representing 1.4 million potential buyers and sellers.
As affordability continues to challenge many first-time home buyers across Canada, 48 per cent of respondents would rather have a smaller home and live close to work, compared to 32 per cent who value larger properties despite a longer commute. Findings were similar in Calgary and Montreal, where 53 and 52 per cent of first-time home buyers also preferred less time commuting between home and work.
While Toronto and Vancouver are home to some of the highest home prices in the country, the majority of those surveyed in both cities responded that proximity to work was more valued than square footage (59% and 54%, respectively). This may be influenced by longer work commutes, with Toronto and Vancouver residents reporting 34 minute and 30 minute one-way travel times both to/from work.
“Even in cities where first-time home buyers have to push themselves to get on the property ladder, cost isn’t the only consideration when buying a first home,” said Soper. “While some young people are relocating to more affordable cities, those who stay value shorter commutes and access to the benefits of city life.”
Forty-nine percent of respondents in Calgary expressed anxiety about their down payment to get the home they wanted, compared to 62 per cent elsewhere in Alberta.
Among Calgarians living with family before buying a home, 47 per cent said their parents did not have plans to later downsize. Twenty per cent of respondents said staying in the home did delay their parents’ decision to downsize while 31 per cent indicated they had siblings who would need to move before parents could downsize.
“There’s definitely more opportunity in Calgary,” says Corinne Lyall, broker and owner, Royal LePage Benchmark. “You have a larger population of younger people who are very career-focused, with more buying ability. There are also a number of Baby Boomers who are in a position to help their millennial children purchase their first home.”
Forty-two per cent of those surveyed in Calgary said their home location represents a similar commute for both spouses/partners, representing the highest percentage compared to other regions. The national average is 36 per cent.
Credit to: https://www.royallepage.ca/en/realestate/news/most-canadian-first-time-home-buyers-anxious-they-will-miss-out-because-of-an-insufficient-down-payment/?fbclid=IwAR2A7yRSuY5iRFmyD8UQXrhl0kKfWTAwttl4XwmCklxem5qUfR-n1ZjDKf0