Re/Max First Time Buyer Report

First-time buyers in major Canadian markets move to get in ahead of higher interest rates, says RE/MAX

Driven by the threat of higher interest rates down the road, first-time buyers are contributing to strong upward momentum in residential housing markets across the country, according to a report released by RE/MAX.

The RE/MAX First-Time Buyers Report, highlighting trends and developments in nineteen major Canadian centres, found that low interest rates and balanced market conditions have provided significant impetus in 2011, particularly at lower price points. Just over 30 per cent of markets are reporting sales in excess of 2010 levels as a result, while almost 70 per cent have experienced an upswing in average price. Leading the country in terms of percentage increases in the number of homes sold are Western Canadian markets, including Saskatoon (up close to 15 per cent), Greater Vancouver (up close to 12 per cent), and Winnipeg (up just over 11 per cent). With an average price hike of close to 20 per cent year-to-date (February), Greater Vancouver continues to show unprecedented strength, followed by Hamilton-Burlington (eight per cent), Quebec City (seven per cent), Winnipeg (close to seven per cent), Greater Toronto (five per cent), and Greater Montreal (five per cent).

Despite homeownership rates approaching 70 per cent, there is clearly room for growth as entry-level buyers make their moves from coast-to-coast, undeterred by higher housing values and changes to lending criteria. Many purchasers intent on realizing homeownership are scaling back on expectations or are willing to sacrifice location, quality and/or size to make their dream a reality – not unlike generations before them.

Inventory levels, while tight in several larger centres, are more balanced overall, giving first-time buyers a good selection of housing product from which to choose. Not surprisingly, condominium apartments and town homes have become the first step for many entry-level purchasers, especially in Greater Vancouver, Victoria, Kelowna, Edmonton, Calgary, London-St. Thomas, Hamilton-Burlington, Greater Toronto, the Island of Montreal, and Halifax-Dartmouth where average prices have risen unabated in recent years.

With the Canadian economy on firmer footing overall, residential real estate is well-positioned moving into the traditionally busy spring market. Consumer confidence is climbing in conjunction with economic performance, and concerns over a secondary recession fade with each passing day. The mood is cautiously optimistic, as first-time buyers enter the market.

Changes to recent financing criteria have not created the anticipated run up in activity in most markets. From a financial standpoint, most rookie home buyers remain quite prudent. Those making the leap are not doing it lightly, buying within their means. While this most recent round of policy tightening will likely have a negligible effect on demand, the message is getting across.

Affordability remains a growing concern in most markets, and—aside from first-time purchasers—no one is more in tune with that than housing planners and developers. In fact, the growing demand for reasonably-priced product is creating a shift in the country’s housing mix. That trend is expected to gain traction in coming years, as builders look to create greater options for those seeking to realize homeownership. In recent years, builders have helped ease the move to homeownership by concentrating on intensification—condominium buildings with smaller suites and small-lot subdivisions offering detached, compact homes at a fraction of the cost of a traditional single-family home. On the flip side, the affordability factor is also breathing new life into tired older neighbourhoods, and that, in turn, is contributing to rising values.

As prices escalate, first-time buyers are indeed spending more—some out of necessity, but others are simply in a position to do so. Unlike in years past—a greater percentage of today’s first-time buyer pool is comprised of dual-income, college or university-educated couples with solid earnings. They’re spending close to average price or slightly more to secure—in most cases—a better location or a home that will grow with them. Yet, the fact remains that those on a tighter budget can get in for considerably less, with reasonable choices in every major market across the country. While some may feel discouraged by eroding affordability levels, the underlying confidence in the concept of homeownership is rising.

While market conditions are one thing that influences first-time buyers, few things trump the fundamental belief in homeownership. Today’s entry-level buyers are steadfast in their mindset. They know they have to live somewhere, but they simply don’t want to pay someone else’s mortgage. Savvy or practical, they remain a driving force. The bottom line is that the demand for entry-level product will remain steady. The role of starter homes in the marketplace is becoming ever more vital.

Download the Full Report here: http://bit.ly/hvEAji

Brantford Real Estate Market Update

Resale housing market continues to soar in April

Home sales recorded through the MLS System of the Brantford Regional Real Estate Association remained very strong in April 2010, coming in just two sales below the record for the month set back in 2004.

According to statistics provided by the Association, residential sales totalled 231 units in April 2010, up 32 per cent from the same month in 2009. This stands less than one per cent below the peak for April sales reached in 2004.

April was another strong month for home sales, said Daniel Marchuk, President of the Brantford Regional Real Estate Association. It is likely that some future demand is being pulled forward right now by buyers motivated to finalize purchases in advance of interest rate hikes and the introduction of the HST.

The average price of home sales in April 2010 was $234,024, an increase of 11 per cent from a year earlier.

The dollar value of all home sales in April 2010 totalled $54.1 million, up 47 per cent from the same month in 2009.

Total sales activity in Brantford numbered 239 units in April 2010, climbing 32 per cent on a year-over-year basis. The total value of all sales activity amounted to $58.2 million, 47 per cent above levels reported in April 2009.

New residential listings on the Association's MLS System rose 15 per cent from year-ago levels to 373 units in April. Despite the rise in new listings, the overall supply of homes for sale on the market remains below last year's levels. Active residential listings on the Association's MLS System numbered 758 units at the end of April, 13 per cent below levels reported one year ago.

There were 3.3 months of inventory at the end of April 2010, the lowest level since August 2007. The number of months of inventory is the number of months it would take to sell current inventories at the current rate of sales activity.

The Brantford Regional Real Estate Association serves an area of Southwestern Ontario that includes the rural areas and communities in Brant County, which includes the City of Brantford, Town of Paris, Villages of Burford, Mount Pleasant, Oakland, Scotland and St. George.