First Time Homebuyers Holding up Real Estate Market

A new report by Remax, is suggesting that first time homebuyers and move up buyers are supporting growth in the Real estate sector in Canada. The report was recently released and provides comparative info on lending costs for first time home buyers across Canada from Halifax to Vancouver.

Mortgage Borrowing Costs for First Time Home Buyers

The report says that “first-time homebuyers and move-up buyers are leading the charge, especially in areas like Richmond and Vancouver Westside, where sales have been particularly brisk. Close to 5,000 homes have changed hands to date, up approximately 12 per cent over the same period one year ago.” And in Kelowna, Remax says “Buyer’s market conditions have contributed to an upswing in home-buying activity in Kelowna, with first-time purchasers taking advantage of pricing, selection, and historically low interest rates. Thirty per cent of year-to-date (February) sales (130 properties out of 418) took place under $260,000, indicating that there are adequate options for buyers on tight budgets—condominiums among the most popular. Nearly 80 condominiums have changed hands in Kelowna.”

It’s odd that the the Finance Minister cited first time homebuyers as some of those borrowers who posed severe risk for the banking industry. Although they’re the most likely borrowers to default, they’re now holding up suffering Canadian construction and real estate industry.

In Edmonton too, first time homebuyers are buying up lower priced properties. Approximately 21 per cent of sales—358 homes—have occurred under the $210,000 price point to date.

Some reports suggest first time homebuyers are actually driving up price in the Vancouver area. It seems many buyers are scaling back their expectations on the size and quality of home or condo to enjoy the benefits of home ownership.

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