Wednesday, 3 November 2010
Almost half of first-time homeowners in Canada say it’s now a buyers market, pointing to a pick up in activity in coming months, according to an online survey conducted by RBC.
About 46 per cent of buyers who purchased a home in the past two years say it’s a buyers market, while 43 per cent of those who intend to buy for the first time said the same.
“That could be an indicator that there is higher home buying activity to come and rates do remain near historical lows,” said Marcia Moffat, RBC vice president of home equity financing Canadian banking, RBC
The property market, which bounced back to record levels in the first half of the year on the back of record low interest rates, has cooled off sharply in recent months. A combination of rising interest rates, the harmonized sales tax in British Columbia and Ontario, and new mortgage regulations all helped take some steam out of the market.
RBC expects prices to rise about eight per cent this year, with gains coming mainly from the first half, before slowing to about 1.4 per cent next year, Chief Economist Craig Wright said.
The RBC poll found 85 per cent of first-time buyers considered buying a home a long-term purchase with only 15 per cent planning to sell in the next two years. As well, 93 per cent plan to buy for their own use and not for investment purposes.
“Most first-time buyers are not planning to buy and flip, that’s good news,” Moffatt said, adding it indicated there was little speculation in the market.
When it comes to financing choices, the research showed the first-time buyer opted for certainty with 59 per cent choosing a fixed rate mortgage. Of those planning to buy in the next two years that figure came down to 49 per cent.
A combination of the two mortgage options, part-fixed rate and part variable, is gaining popularity with 31 per cent of future buyers saying that would be their choice, compared with just seven per cent of those who bought in the past two years.