REDISCOVER REAL ESTATE

More buyers pushed out of market...for now.

Good news for landlords. Buying and servicing a home in Canada is increasing, and that obstacle may prove enough for buyers to hold off from entering the market for now.

Good news for landlords. Buying and servicing a home in Canada is increasing, and that obstacle may prove enough for buyers to hold off from entering the market for now.

According to the new RBC report on affordability, it is estimated that a household has to devote over 40 per cent of its pre-tax income to service the cost of owning a bungalow at current market values.  While the cost of servicing a condo increased marginally, it still accounts for almost 30 per cent of pre-tax income.

While the Bank of Canada says they will raise interest rates gently upwards in 2015, many first-time buyers are still paralyzed by fear of a major hike and affected by negative media coverage surrounding the country’s economy.

“Going forward, affordability could become a deterrent for homebuyers in this country if it were to deteriorate much further due to, for example, a surge in interest rates,” says the report.

Affordability is a problem across all Canada’s markets, says RBC, with most of the deterioration occurring in single-family home categories.  Vancouver and Toronto were naturally the worst for affordability, while Alberta and the Atlantic region “still looked reasonably attractive for the most part in the third quarter.”

“We expect home resales to stabilize near the current not-too-hot and not-too-cold levels, although some further modest pullback may occur in the near term,” says RBC.

Source - Canadian Real Estate Wealth

Looking to buy, sell or refinance? Know your options. I can help! Direct line: 416-219-6662

Generation-Y wants it all!

They are younger and most earn less than other homebuyers but their expectations and demands are much higher. This is the new world of the ‘first-time buyers’.

Generation-Y want it all, and want it today. And that includes a house and not just an entry level condo. A new report by the CMHC shows that this generation is not willing to wait around to get on the property ladder. Almost two-thirds of first-time homebuyers are now under the age of 35.

I have encountered many of these buyers at either recent open houses or through mortgage brokers. Many are now eager to buy with over 30 per cent and wanting to make the big purchase within the next five years, compared to 19 per cent of repeat buyers.

And while their plans are big, their pockets are not as much and hence the growing reliance on parents to help out with the down-payment.  Compared to other homebuyers, nearly two-thirds of first-timers have household incomes of $90,000.

I find that a lot of first-time buyers, and more so young couples, save a lot for their own down-payment. Obviously, there are those that need help but those who want to be like their peers in terms of house ownership are willing to sacrifice to achieve that.

While conscious, this generation of buyers are not always realistic. Unfortunately, many of their expectations do not match the reality of the market. Many buyers are set on a number of neighbourhoods where their family and friends live and are willing to over-stretch themselves financially to attain that. I also believe sellers need to be prepared for an information hungry generation of buyers.

In terms of property choice, while most favour single-detached houses, they are also more drawn to semi-detached and row/townhouses compared to repeat buyers.

 

Are you a first-time homebuyer? Need some mortgage advice? What are your real estate options?

How may I help you today? Direct line: 416-219-6662

Every single day we're making homeowner dreams come true. Call Cindy Pusateri at Invis today for a free consultation. (click banner below for more details)

 

Some good news, and some news....

2014 is already shaping up to be a good year for some, with prices and the number of existing home sales expected to increase moderately.

Now that talk of a property crash has faded somewhat, many appear to be on the ‘happy’ bandwagon when discussing real estate. This optimism has been fuelled by Bank of Canada’s announcement that it is pushing out its timeline for interest rate increases while Finance Minister Jim Flaherty confirming that he has no intention of interfering in the housing market.

According to the CMHC, the average selling price will be in line with inflation and rise by 1.9 per cent in 2014. Based on current data, they expect house prices to rise overall by four per cent in 2013.

Housing starts, the CMHC says, will remain “stable” as inventories of unabsorbed units, completed and under construction, are drawn down.

The housing market is very hard to predict but these numbers are relatively accurate. Obviously, every market is different, and especially when you look at the current demand for detached homes in the GTA, with buyers having and willing to pay more.

There has been a lot of fear put into buyers, with many thinking twice before they take that plunge, thanks to all of the bad press but I believe that Buyers are tuning out of negative media reports and taking advantage of the favourable economic conditions to snap up properties.This is now changing, as are the headlines.

Looking to buy, sell or refinance? Know your options. I can help! Direct line: 416-219-6662