According to a new study, released by the Altus Group, First Time Homebuyers are responsible for about one in every two homes sold in Canada over the last two years, over more than a quarter of a million sales per year across the country.
From the Altus Group study, of these first timers, the majority are under the age of 35- with the demographic made up of 25-34 year olds comprising 60% of those purchasing for the first time. One in four is aged 35-49 years old.
Also in the findings, one quarter of this group were made up of single person households, and more than one-fifth of first-time buyers chose to buy a newly-built home. Of these, about one in three chose to buy a condo.
According to the report, “The average house price for a recent (first-time buyer) in Canada was about $273,000. This is about four times the average annual household income of about $69,000 — up substantially from the price/income ratio of 2.7 per cent for (first-time buyers) in the 2001-2002 period,”
How does this actually translate into the market- now and later? With debt-to-ratio incomes higher- and a substantial increase in the gap between income and property price, it is encouraging for the long term market that some are gathering assets, work and life experience before jumping into home ownership. This caution suggests that these homeowners would be able to sustain their debts in the long term.
The report stated as well, that first time buyer intentions were down among renters, year-over-year, and also below average from the 2002-2009 period. This is partly attributed to the recent introduction of Jim Flaherty’s mortgage restrictions.
These lending restrictions, coupled with rising prices in some centres, is prohibitive for some potential first time buyers and, according to the report, will keep them out of the market until these specific conditions improve.
We would definitely agree with this statement. However, I would have to say that this is the way that it’s been for much more than 2 years. For our entire career in Real Estate, First Time Buyers account for over half of our business. Not to mention our average age is considerably lower than many other parts of the country