First-time homebuyers make up 45 per cent of the 620,000 homes sold across Canada in the past two years, according to a new survey by the Canadian Association of Accredited Mortgage Professionals.
“There is intense interest in the Canadian housing market, especially from first-time buyers,” said Jim Murphy, president and CEO of CAAMP.
“CAAMP’s spring report focuses specifically on this group and we can say with confidence that first-time homebuyers are some of the most engaged, enthusiastic and well-researched groups in the market.”
The survey, published on Tuesday, found that the average price that first-time buyers spent on a home was $308,100, and the most common price range was between $200,000 and $249,999.
Nearly half (47 per cent) of first-time buyers purchased single-detached homes, followed by condominiums (22 per cent). Condos were purchased most often in B.C. (31 per cent) and Ontario (21 per cent).
The highest prices on average were for the purchase of single-detached homes ($360,000); however, other housing types are not much lower, with townhomes at $351,000, condos at $336,200, and semi-detached homes at $327,500.
The most common reason that Canadian first-time buyers gave for purchasing a home was to stop renting (51 per cent). Another interesting reason was buyers’ perceptions about the advantages of owning a home, such as providing financial security and the perceived pride.
When it came to financing this first purchase, the largest source for down payments was personal savings, followed by the bank of Mom and Dad.
First-time buyers on average were able to put $67,000 down as the first payment on their new home. This represents 21 per cent of their average purchase price.
The survey also found that 47 per cent of first-time buyers are optimistic about the economy in the upcoming 12 months, though Will Dunning, CAAMP’s chief economist, expressed concern about this figure.
“Job creation has slowed over the past two years creating a risk that could have a domino-effect on the entire Canadian economy,” he said in the report. “Fewer jobs mean reduced activity in both the resale market and new housing construction.
“Housing demand in much of Canada is also slowing, with resale activity moderate and prices flattening – with the exception of major markets like Vancouver and Toronto, whose skyrocketing prices are due to issues of supply and demand.”