Ontario’s First Time Home Buyers want new, detached homes, for less than asking price
- TD Canada Trust releases 2010 Home Buyers Report –
TORONTO, July 5 /CNW/ – The majority of Ontario first time home buyers prefer newer and detached homes to older and semi-detached homes or condos and expect to pay less than the asking price. This is according to the first TD Canada Trust Home Buyers Report which surveyed Canadians who have purchased their first home in the past 2 years or who intend to purchase a home in the next 2 years.
More than half (56%) of Ontarian home buyers bought or intend to buy a fully detached home and almost three-quarters (73%) would prefer a new home over an older home, but can they afford it? Nine-in-ten first time buyers in Ontario took out or expect to take out a mortgage for their home. But, compared to the national average, many homebuyers in Ontario plan to have more than a 20% down payment (36% vs. 30% nationally), which means only 64% will require their mortgage to be insured by organizations like the Canada Mortgage and Housing Corporation (CMHC). Sixty-two per cent are worried about being able to afford their home if interest rates rise.
“It’s only natural to want your first home to be the home of your dreams, but it is important to be realistic about what you can afford as a down payment what that will mean for both the type of home you buy and for your mortgage payments over time,” says Farhaneh Haque, Regional Sales Manager, Mobile Mortgage Specialists, TD Canada Trust. “I advise first time home owners to consider a larger down payment because a 10% or greater down payment will make a big difference. It may mean that you need to save longer before buying your first home, but it will pay off in the end. Speak with a representative at your bank about setting up an automatic savings plan to help you save.”
Home financing:
Nine-in-ten Ontarian buyers report putting down as much as they can afford for a down payment (92%). Fifty-five per cent say they saved or plan on saving for two years or less for their home purchase. Two-thirds say they expected or expect to pay less than the asking price for their home. Only 7% expect to pay more, while 27% expect to pay the asking price.
Seventy-two per cent of those surveyed in Ontario have or plan to have a fixed-rate mortgage. “Historically you are more likely to save interest costs with a variable rate or short-term mortgage option, so if they can handle some volatility then I recommend buyers choose a variable rate. If people are adverse to interest rate fluctuations then a fixed-rate is best,” says Haque.
What kind of homes do Ontarians want?
While the majority choose detached homes, 18% chose condos and Ontarians are most likely in the country to prefer town homes (17% vs. 12% nationally).
Compared to the rest of the country, Ontarians are most willing to sacrifice the size of their home to eliminate a commute. Fifty-seven would prefer a smaller home closer to work (versus 55% nationally). Not surprisingly, price is the most important factor when considering what kind of home to buy and where (99%). Followed by features of the home (97%) and layout of the home (96%).
Home shopping process:
Ontarian buyers do their due diligence when searching for a home, spending more than 7 months looking for a home and viewing more than 15 homes on average before buying. Although they spend a lot of time shopping, not everyone plans to spend many years in their first home. Fourteen per cent say they plan to spend less than 3 years in their first home and one-third plan to stay in their home 4 to 6 years.
About the TD Canada Trust Home Buyers Report:
Results for the TD Canada Trust Home Buyers Report were collected through a custom online survey conducted by Environics Research Group. A total of 1,000 completed surveys were collected between June 8-21, 2010, including 390 from Ontario. All participants either purchased their first home within the past 24 months, or intend to purchase their first home within the next 24 months.
Cheers!
Courtesy of
Joan Bidner
Mobile Mortgage Specialist
TD Canada Trust
T: 519-857-7473
F: 519-473-7633
E: joan.bidner@td.com
www.tdcanadatrust.com/msf/joanbidner
Thank you for your business!