buyers are contributing to strong upward momentum in residential housing markets across the country,
according to a report released today by RE/MAX.
The RE/MAX First-Time Buyers Report, highlighting trends and developments in nineteen major
Canadian centres, found that low interest rates and balanced market conditions have provided
significant impetus in 2011, particularly at lower price points. Just over 30 per cent of markets are
reporting sales in excess of 2010 levels as a result, while almost 70 per cent have experienced an
upswing in average price. Leading the country in terms of percentage increases in the number of homes
sold are Western Canadian markets, including Saskatoon (up close to 15 per cent), Greater Vancouver
(up close to 12 per cent), and Winnipeg (up just over 11 per cent). With an average price hike of close to
20 per cent year-to-date (February), Greater Vancouver continues to show unprecedented strength,
followed by Hamilton-Burlington (eight per cent), Quebec City (seven per cent), Winnipeg (close to
seven per cent), Greater Toronto (five per cent), and Greater Montreal (five per cent).
“Despite homeownership rates approaching 70 per cent, there is clearly room for growth as entry-level
buyers make their moves from coast-to-coast, undeterred by higher housing values and changes to
lending criteria” says Michael Polzler, Executive Vice President, RE/MAX Ontario-Atlantic Canada.
“Many purchasers intent on realizing homeownership are scaling back on expectations or are willing to
sacrifice location, quality and/or size to make their dream a reality – not unlike generations before
them.”
Inventory levels, while tight in several larger centres, are more balanced overall, giving first-time buyers
a good selection of housing product from which to choose. Not surprisingly, condominium apartments
and town homes have become the first step for many entry-level purchasers, especially in Greater
Vancouver, Victoria, Kelowna, Edmonton, Calgary, London-St. Thomas, Hamilton-Burlington, Greater
Toronto, the Island of Montreal, and Halifax-Dartmouth where average prices have risen unabated in
recent years.
“With the Canadian economy on firmer footing overall, residential real estate is well-positioned moving
into the traditionally busy spring market,” says Elton Ash, Regional Executive Vice President, RE/MAX of
Western Canada. “Consumer confidence is climbing in conjunction with economic performance, and
concerns over a secondary recession fade with each passing day. The mood is cautiously optimistic, as
first-time buyers enter the market.”
Changes to recent financing criteria have not created the anticipated run up in activity in most markets.
From a financial standpoint, most rookie home buyers remain quite prudent. Those making the leap are
not doing it lightly, buying within their means. While this most recent round of policy tightening will
likely have a negligible effect on demand, the message is getting across.
Affordability remains a growing concern in most markets, and—aside from first-time purchasers—no
one is more in tune with that than housing planners and developers. In fact, the growing demand for
reasonably-priced product is creating a shift in the country’s housing mix. That trend is expected to gain
traction in coming years, as builders look to create greater options for those seeking to realize
homeownership. In recent years, builders have helped ease the move to homeownership by
concentrating on intensification—condominium buildings with smaller suites and small-lot subdivisions
offering detached, compact homes at a fraction of the cost of a traditional single-family home. On the
flip side, the affordability factor is also breathing new life into tired older neighbourhoods, and that, in
turn, is contributing to rising values.
As prices escalate, first-time buyers are indeed spending more—some out of necessity, but others are
simply in a position to do so. Unlike in years past—a greater percentage of today’s first-time buyer pool
is comprised of dual-income, college or university-educated couples with solid earnings. They’re
spending close to average price or slightly more to secure—in most cases—a better location or a home
that will grow with them. Yet, the fact remains that those on a tighter budget can get in for
considerably less, with reasonable choices in every major market across the country. While some may
feel discouraged by eroding affordability levels, the underlying confidence in the concept of
homeownership is rising.
“While market conditions are one thing that influences first-time buyers, few things trump the
fundamental belief in homeownership,” says Sylvain Dansereau, Executive Vice President, RE/MAX of
Quebec. “Today’s entry-level buyers are steadfast in their mindset. They know they have to live
somewhere, but they simply don’t want to pay someone else’s mortgage. Savvy or practical, they
remain a driving force. The bottom line is that the demand for entry-level product will remain steady.
The role of starter homes in the marketplace is becoming ever more vital.”
RE/MAX is Canada’s leading real estate organization with over 18,000 sales associates situated
throughout its more than 690 independently-owned and operated offices in Canada. The RE/MAX
network, now in its 38th year, is a global real estate system operating in 80 countries, with over 6,300
independently-owned offices and over 92,000 member sales associates. RE/MAX realtors lead the
industry in professional designations, experience and production while providing real estate services in
residential, commercial, referral, and asset management. For more information, visit: www.remax.ca.
No comments:
Post a Comment