Number of first-time home buyers drops as prices soar
The number of Canadians buying a home for the first time has dropped significantly over the past year, a new report shows.
A nationwide consumer survey conducted by the Canada Mortgage and Housing Corporation (CMHC) found that 47 per cent of mortgage purchases in 2019 were made by first-time home buyers, which is down from 56 per cent the previous year.
The field study, which was conducted between March and May, polled nearly 1,400 firsttime and repeat home buyers from across the country. More than one third of respondents were from Ontario, while a quarter were from Quebec.
That the number of first-time home buyers has decreased didn’t come as much of a surprise for Colette Kikongi, CMHC’s planning specialist and spokesperson. A number of factors, including housing affordability, played a role in making the number of qualified buyers go down, she said.
“Eighty per cent of the buyers said that being able to find a house that they could afford was a necessity for them,” said Kikongi, who noted home prices have been steadily climbing in markets such as Toronto and Vancouver over the past few years, making it harder for new buyers to break in.
“Affordability is the main concern. Also, we see in our data that half of the home buyers are concerned about housing costs and home expenditure being too much. All that combined would probably explain why there is a decrease,” she added.
Home prices in the Toronto region are projected to climb even higher, with an average of $949,400 by 2021, according to another CMHC report released last month.
Still, results from the consumer survey showed most firsttime home buyers live in Ontario, and are between the ages of 18 and 34. The survey also showed that newcomers to the market are taking their time before committing to home ownership, partly because of affordability, but also, partly, because they are being more careful about the commitment.
The number of first-time home buyers who were renting for more than 10 years before buying jumped from 22 per cent in 2018 to 31 per cent in 2019, according to the report.