More than a third of homebuyers in the GTA were given a lump sum payment from parents or relatives to purchase their first property and nearly 75 per cent of first-time homebuyers in the GTA worried that their down payment would not be enough, according to a new survey by Royal LePage.
The survey results, which were released Thursday, looked at key trends among first-time homebuyers who bought a residence within the last two years.
“The biggest hurdle first-time homebuyers face is coming up with a substantial down payment. Using the ‘bank of mom and dad’ for a top-up on a down payment is not uncommon; buyers often receive a comfortable five-figure sum towards their first home from family,” Tom Storey, a sales representative for Royal LePage Signature Realty, said in a written statement.
He noted that first-time buyers in the GTA are often dual-income couples in their thirties.
“The age of the average buyer in the region has increased over time, as affordability barriers continue to force buyer hopefuls to postpone their purchase plans,” Storey said.
According to the survey, 36 per cent of first-time homebuyers in the GTA say they received a lump sum payment from parents or relatives to purchase a home. About 29 per cent said they received financial help with their monthly mortgage payments.
Forty-four per cent of first-time homebuyers in the GTA said the financial assistance they received was a gift.
About 29 per cent of first-time homebuyers in the GTA said they purchased a home in a different neighbourhood or region than they had originally planned due to affordability issues and 37 per cent said they purchased a smaller home than they had planned.
“Canadians continue to face challenges in entering the real estate market, be it high interest rates, strict mortgage qualification standards, or difficulty saving enough money in a reasonable time period for a down payment,” Phil Soper, president and CEO of Royal LePage, said in a written statement.
“Still, they continue to prioritize home ownership, and view it as a milestone worth achieving.”
Storey said most buyers surveyed were prepared to settle for what they could afford in order to get into the market.
“If their down payment will not get them into their dream home, most buyers are prepared to settle for a smaller property or a condo in order to build equity towards an eventual move-up home,” he said.
TORONTO – One expert predicts Ottawa‘s changes to mortgage rules will help spur demand among potential homebuyers but says policies aimed at driving new supply are needed to address the “core issues” facing the market.
The federal government’s changes, set to come into force mid-December, include a higher price cap for insured mortgages to allow more people to qualify for a mortgage with less than a 20 per cent down payment.
The government will also expand its 30-year mortgage amortization to include first-time homebuyers buying any type of home, as well as anybody buying a newly built home.
CIBC Capital Markets deputy chief economist Benjamin Tal calls it a “significant” move likely to accelerate the recovery of the housing market, a process already underway as interest rates have begun to fall.
However, he says in a note that policymakers should aim to “prevent that from becoming too much of a good thing” through policies geared toward the supply side.
Tal says the main issue is the lack of supply available to respond to Canada’s rapidly increasing population, particularly in major cities.
This report by The Canadian Press was first published Sept. 17,2024.
OTTAWA – The Canadian Real Estate Association says the number of homes sold in August fell compared with a year ago as the market remained largely stuck in a holding pattern despite borrowing costs beginning to come down.
The association says the number of homes sold in August fell 2.1 per cent compared with the same month last year.
On a seasonally adjusted month-over-month basis, national home sales edged up 1.3 per cent from July.
CREA senior economist Shaun Cathcart says that with forecasts of lower interest rates throughout the rest of this year and into 2025, “it makes sense that prospective buyers might continue to hold off for improved affordability, especially since prices are still well behaved in most of the country.”
The national average sale price for August amounted to $649,100, a 0.1 per cent increase compared with a year earlier.
The number of newly listed properties was up 1.1 per cent month-over-month.
This report by The Canadian Press was first published Sept. 16, 2024.
MONTREAL – Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.
Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.
Girouard is a well-known broker who previously starred on a Quebec reality show that follows top real estate agents in the province.
She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.
The two brokers were suspended in May 2023 after La Presse published an article about their practices.
One buyer ended up paying $40,000 more than his initial offer in 2022 after Girouard and Dauphinais-Fortin concocted a second bid on the house he wanted to buy.
This report by The Canadian Press was first published Sept. 11, 2024.
