Oakville Real Estate News

Genworth Canada First-Time Home Ownership Study 2015


Blog by Joette Fielding | April 21st, 2015


April 7, 2015

Genworth Canada Releases First-Time Homeownership Study

TORONTO, April 7, 2015 /CNW/ - First-time homebuyers are doing their homework and making responsible financial decisions entering Canada's housing market, according to a new study released by Genworth Canada.  The 2015 Genworth Canada – First-Time Homeownership Study shows that the typical first-time homebuyer is well-educated, employed, consulting with mortgage industry professionals and purchasing a home within financial reach.

"The survey shows that today's first-time homebuyers have their eyes wide open, their hands firmly on their pocketbook and are thinking hard before assuming the responsibility of homeownership," said Stuart Levings , President and CEO of Genworth Canada. "This prudence and careful planning should serve Canada's housing market well as responsible first-time buyers grow into responsible long-term owners."

Overall, first-time buyers tend to have higher incomes than the general population with 31% having household incomes above $100,000. Other typical traits of this primarily millennial population include working full-time (81%), holding a post-secondary education (89%) and married or in a common-law relationship (71%). One-fifth of all those surveyed were born outside of Canada with 62% of that group having immigrated in the past ten years.

According to the survey, the typical first-time buyer is also conscious of the need to manage their debt burden carefully. More than half (57%) have taken care to avoid taking on additional debt since buying their home. In addition, one-third (36%) have doubled-up or increased their bi-weekly mortgage payments, or made a larger, one-time lump sum payment.

"With good incomes, solid jobs and a financial partner with whom to share the responsibility of homeownership, most first-time homebuyers generate a positive profile from the perspective of a mortgage insurer," added Levings.

Clearly there are regional variations across Canada with respect to affordability that lead to some significant differences in price paid, type of home purchased and down payment levels. While the median price paid nationally is $293,000, this amount is highest in Toronto ($425,000) and Vancouver ($420,000) and lowest in the Atlantic region ($185,000).

These price variances explain the higher proportion of condo and town-home purchases in Toronto, Vancouver and Montreal, where such properties are the most affordable way to enter homeownership. Nationwide, 55% of first-time buyers settle on a fully detached home with 17% opting for a condominium, 15% buying a townhouse and 13% purchasing a duplex. By contrast, condominiums are the most popular option in Vancouver (47%), Montreal (40%) and Toronto (39%). In Atlantic Canada, on the other hand, fully detached homes account for 71% of all first-time home purchases.

The survey also notes higher median down payments in Toronto and Vancouver, which appear to be driven by higher savings and larger gifts or loans from a family member in those markets. While the median down payment nationally is 12%, this amount ranges from 8% in the Atlantic region to 21% in Toronto, as noted in the table below. Overall, 63% of buyers surveyed made a down payment of less than 20%.

First-Time Buyers: Key Regional Variances

Market

Median
Price Paid

Median
Down
Payment

Down
Payment
<20%

Household
Income
>$100k

Condo
Purchase

Vancouver

$420,000

20%

47%

32%

47%

Calgary

$370,000

10%

73%

39%

24%

Toronto

$425,00

21%

38%

40%

39%

Montreal

$250,000

13%

60%

24%

40%

Atlantic

$185,000

8%

77%

21%

5%

 

Source: The 2015 Genworth Canada – First-Time Homeownership Study

 

In terms of factors influencing choice of home, the group ranked price (94%), safe neighbourhood (91%) and size (90%) as their highest priorities. Other top motivators include the belief that owning is a wiser financial decision than renting, having saved enough for a down payment and wanting control of the property they live in.

"First-time homebuyers reflect the home buying population as a whole when it comes to their general motivations and considerations," said David MacDonald , Group Vice President, Environics Research Group. "They're looking for affordability, safe streets and a space they can enjoy. Even when opting for a condo, these factors rank higher than, for example, return on investment."

genworth_infographic_ourveryfirsthome_en.jpg

The 2015 Genworth Canada – First-Time Homeownership Study was conducted and analysed by Environics Research Group between February 5 and March 4, 2015. A total of 1,800 interviews were completed using an online methodology.

Content courtesy of http://www.genworth.ca


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