Healthy first-time buyer segment expected to bolster GTA home sales
in 2015/2016, says RE/MAX Hallmark Homebuyer Survey
41 per cent of first-time surveyed buyers are single
Toronto, ON (October 5, 2015) — First-time purchasers represent almost one-third (32 per cent) of surveyed homebuyers seriously intent on making a move over the next 18 months in the Greater Toronto Area (GTA), according to a survey released today by RE/MAX Hallmark Ltd., one of the country’s largest real estate franchises.
The RE/MAX Hallmark GTA Homebuyer Survey, conducted among 505 prospective purchasers between Sept. 22 and Sept. 28, 2015, is a barometer of home buying intentions for the remainder of 2015 and 2016. Despite challenges in terms of housing affordability and availability, especially evident at entry-level price points, surveyed first-time buyers are ready to move forward with their plans of homeownership.
“We initially set out to gauge how the convergence of negative influences, including the ‘technical recession,’ stock market volatility and global uncertainty, would impact homebuying activity in the GTA,” says Ken McLachlan, Broker/Owner of RE/MAX Hallmark Ltd. “What we found was the key to the underlying strength of the overall market – a healthy first-time buying segment.”
In the next 18 months, surveyed first-time buyers intend to spend an average of $455,000 on their first home, with a mean downpayment of 22 per cent. More than 50 per cent will utilize the Home Buyer’s Plan to realize homeownership. One in four surveyed first-time buyers will receive help from family/gift. The survey also found that 57 per cent of first-time buyers are millennials – 18 to 34 years of age. Forty-one per cent of first-time buyers are single.
“A new picture is emerging in terms of the first-time buyer,” says McLachlan. “They’re a key player in today’s market. They’re young and fiscally responsible. Fifty-eight per cent are currently renting. Six out of 10 – 61 per cent – are looking at properties in the City of Toronto, in close proximity to employment and transportation. Nearly half are seeking homes priced under $450,000.”
Homeownership will likely take the form of a condominium apartment for many, especially those purchasers who favour the downtown core. While 56 per cent of surveyed first-time buyers prefer single detached homes, condominium apartments rank second at 44 per cent. The suburbs also have a following, with 39 per cent of first-time buyers planning to make their moves outside of the 416 area code.
“The emphasis that millennials, in particular, place on homeownership is especially interesting,” says McLachlan. “It appears that owning a home is just as coveted by those born between the early 1980s and the early 2000s as in previous generations.”
The challenges, in terms of achieving homeownership, are vastly different than those their parents faced, explains McLachlan. Low interest rates make the timing ideal to enter the market, but the threat of higher rates down the road has proved disconcerting for many. Furthermore, rising housing values in large centres such as the GTA have limited choice for first-time buyers, with compromise on size and location a given in most neighbourhoods. Yet, 84 per cent of surveyed first-time buyers believe that buying a home now is a good financial decision for them/and their families.
From September 22nd to September 28th, an online survey was conducted among 505 Angus Reid Forum panel members who are GTA residents aged 18+ and intend to purchase a home in the GTA in the next 18 months.