First-Time Buyers Driving Property Markets: CAAMP

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TORONTO – A new survey-based report, issued by the Canadian Association of Accredited Mortgage Professionals, has revealed new insights on the decision-making process, as well as financial parameters, of home buyers across the country.

Completed in June 2015, A Profile of Home Buying in Canada was based on a survey of more than 800 Canadians, all of whom bought a home at some point between January 2013 and April 2015. While the whole report is worth a look, we decided to highlight a few of the more pertinent points from a Toronto real estate perspective.

First-Time Buyers: A Newly Significant Demographic

One of the report’s most striking observations is that since 2013, first-time homebuyers have represented roughly 45 per cent of the average 620,000 Canadians buying homes each year. That’s a significant majority, and perhaps even more interestingly, the report notes that most of those first-time buyers have been between the ages of 25 and 34.

The report also delivered a few more insightful facts about Canada’s increasingly important demographic of first-time buyers:

  • During the survey period, first-time buyers’ down payments on homes averaged $67,000, or roughly 21 per cent of the average nationwide purchase price.
  • They’re buying more detached homes – 130,000 a year, on average – than any other type of home. The runner-up, unsurprisingly, is condominium apartments, of which first-time buyers have been purchasing an average of 60,000 annually (that’s 20,000 more condos than second-time buyers, and 40,000 more than buyers purchasing their third home or beyond).
  • When buying their first home (between 2013 and now), 42 per cent ended up settling on a price within the range of $150,000 to $349,999. Only 16 per cent found themselves paying between $200,000 and $249,999.

“Among first-time buyers the process of home buying is often kick-started by a change in personal circumstances or their financial circumstances, or by perceptions about financial advantages of homeownership,” reads the report.

“Repeat buyers are more likely to mention dwelling location and features.”

Lack of Supply Driving Red-Hot Demand in Toronto and Vancouver

“In Toronto and Vancouver, the determining factor is lack of supply rather than reduced demand,” reads the report’s Introduction and Summary. “In those two markets, prices are increasing very rapidly, which is causing the national average resale price to increase.”

Indeed, the report’s figures show that during April 2015, Toronto and Vancouver experienced a 13.1 per cent increase (seasonally adjusted; year-over-year) – helping spur a national year-over-year boost of 9.5 per cent during the same month.

For the rest of the country excluding Toronto and Vancouver, however, the increase was just 1.4 per cent – a solid indicator that Toronto’s property values are currently among the strongest in Canada.

To take a look at other survey results released by the CAAMP – including regular check-ins on Canada’s mortgage market – check out their Industry and Consumer Reports page.

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