Great Article today in the Calgary Herald!
First-time buyers fuelling housing market in Calgary
Low interest rates helping to push sales upward
CALGARY - First-time homebuyers have accounted for roughly half of home sales in recent years and continue to be a strong part of the Canadian housing market, according to a new report.
The report from the Altus Group said that on average first-time buyers purchase homes that are below the overall average selling price - about 10 per cent less for purchases between 2009-2013 in Calgary and for Canada on a whole.
It also found that the average price-to-income ratio in Calgary was 3.7 per cent, slightly higher than the Canadian ratio of 3.4, but lower than Vancouver at 4.7 and Toronto at 4.0.
“My team has definitely fielded more calls than ever for first-time homebuyers,” said Tanya Eklund, a Calgary realtor with RE/MAX Real Estate (Central). “I would equate this to the low vacancy for rentals and increased cost of renting due to low vacancy.
“First-time homebuyers also recognize the cost to borrow money is very reasonable so why pay someone else’s mortgage when you could pay your own. It is very frustrating for buyers when they cannot find quality places to rent for a reasonable price which has been the case. I suspect the trend will continue as long as interest rates stay low.”
The condo apartment market is one of the avenues first-time homebuyers seek to enter into the housing market. According to the Calgary Real Estate Board, year-to-date in the city until Aug. 17, there have been 3,192 MLS sales in the condo apartment market, which is up 21.28 per cent from the same period last year and the average sale price has jumped by 8.85 per cent to $325,178.
Mark Kolentsis, 28, and a first-time buyer purchased his two-bedroom condo in February and took possession on July 31. He had been looking since the fall but didn’t find much that would suit what he wanted. However, in the New Year he found the right condo - although others did too as seven offers were on the property.
“The price was right and interest rates are good,” said Kolentsis, an assistant superintendent at the Glencoe Golf and Country Club.
The Altus Group report estimates that there were about 300,000 first-time buyers in Canada per year on average in 2009-2013. About half of them were in the 25-34 year age group with the median age of 34. Single-person households accounted for about one in five first-time buyer sales.
“The extent to which these FTB levels prevail will be a function of the size of the population in the key first-time buying age groups, their willingness to purchase a home and their financial ability to do so,” said the report.
“Demographics alone are not a cause for concern about declining FTB activity in the short-term. According to Statistics Canada estimates, the size of the population in the key under 50 age groups is currently similar to what it was five years ago.”
It said current renters under 50 years still predominantly are either planning to buy a home someday, or would like to, but don’t feel they can afford it or that now is not the right time.
“Only about one in five renters under 50 years say they prefer the renter lifestyle or don’t want the responsibility of homeownership,” said the report, adding that there are about 2.4 million renter households under the age of 50 years in Canada.