Hous­ing mar­ket

Calgary Sun - - HOMES - Thomas

A ma­jor­ity of Cana­di­ans be­lieve now is a good time to buy a home and, de­pend­ing on the age group and lo­ca­tion, stress lev­els about mak­ing a pur­chase vary.

These are just two of the find­ings found in a new study by Mort­gage Pro­fes­sion­als Canada, which sur­veyed more than 4,100 Cana­di­ans about their home-buy­ing thoughts.

“Over­all, Cana­di­ans are feel­ing op­ti­mistic about the hous­ing mar­ket and the econ­omy. Eco­nomic growth con­trib­utes to higher in­comes and con­sumers’ abil­ity to make solid down­pay­ments and man­age house­hold debt,” said Paul Taylor, pres­i­dent and CEO of Mort­gage Pro­fes­sion­als Canada. “Even in the pres­sured hous­ing mar­kets of Toronto and Van­cou­ver, per­sonal cir­cum­stances, rather than a sense of ur­gency, are in­flu­enc­ing pur­chas­ing de­ci­sions. The sig­nif­i­cant surge in de­mand for new homes in Toronto in the early spring was an aber­ra­tion. For­tu­nately, it was short lived.”

Four dif­fer­ent buyer groups were iden­ti­fied for the sur­vey: Down­siz­ers (home­own­ers who are cur­rently look­ing to pur­chase a smaller or less ex­pen­sive home, or to move to a ren­tal dwelling or care fa­cil­ity); move-up buy­ers (home­own­ers who are cur­rently look­ing to move to a more ex­pen­sive home); next gen­er­a­tion buy­ers (rent­ing or liv­ing with par­ents or other fam­ily mem­bers, and born in 1964 or later), and; re­cent buy­ers (pur­chased a home in Fe­bru­ary 2016 or later).

Here are some high­lights from the study:

55 per cent of Cana­di­ans feel now is a good time to buy a home. Sig­nif­i­cantly, only 44 per cent of next gen­er­a­tion buy­ers think now is a good time to buy, com­pared to re­cent buy­ers (67 per cent), move-up buy­ers (58 per cent) and down­siz­ers (52 per cent).

Next gen­er­a­tion home buy­ers in Toronto and Van­cou­ver have the high­est stress lev­els around home pur­chas­ing de­ci­sions while those in At­lantic Canada and Que­bec have the low­est.

Next gen­er­a­tion buy­ers aren’t mo­ti­vated by mar­ket con­di­tions or the fear of miss­ing out but are mo­ti­vated by their per­sonal cir­cum­stances.

Cana­di­ans gen­er­ally con­sider mort­gages as good debt with re­cent home buy­ers most pos­i­tive.

Only 46 per cent of Cana­di­ans were aware of changes to Canada’s mort­gage rules. Aware­ness is sig­nif­i­cantly lower among the next gen­er­a­tion of home buy­ers (29 per cent) while aware­ness is sig­nif­i­cantly higher among re­cent buy­ers (55 per cent).

Prior to dis­cus­sions about the mort­gage rule changes, two in 10 Cana­di­ans said they plan to rent a part of their home, while one in 10 plan to buy jointly with some­one other than their sig­nif­i­cant other as strate­gies to af­ford home­own­er­ship. How­ever, that changed to three in 10 and just over one-quar­ter re­spec­tively af­ter be­ing pre­sented with the mar­ket im­pli­ca­tions of the new stress test.

About 20 per cent of po­ten­tial buy­ers would be dis­qual­i­fied by the stress test, based on a hy­po­thet­i­cal rate of 4.64 per cent.

Of those who said that they would in­crease their down pay­ments to avoid the stress test:

• 31 per cent would with­draw from RRSPs,

• 16 per cent would ob­tain loans from fi­nan­cial in­sti­tu­tions,

• 43 per cent would de­lay their pur­chase, and

• 30 per cent would seek help from fam­ily (gifts/loans).

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