If you’re a first-time homebuyer trying to get into the market, you probably get knots in your stomach when you hear a single-family home in Toronto now averages more than $1 million, or that Vancouver’s housing market is even more insanely competitive following a 53.7-per-cent hike in sales last month.
But those numbers reflect all the buyers in the market, from wealthy investors speculating on land to Baby Boomers upsizing to luxury homes. For the first-time home buyer, things aren’t quite that daunting. Not yet, anyway.
Private mortgage insurer Genworth Canada has put out a survey showing what first-time home buyers are paying in different parts of the country, and not surprisingly there are some big variations.
One surprising result is that Torontonians are paying more — slightly more, but more — than Vancouverites for first-time homes. The median price of a first home in the Toronto area was $425,000 in Genworth’s survey of 1,800 Canadians, versus $420,000 in the Vancouver area. This despite Vancouver having the second-least affordable housing market in the world, by one measure.
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The survey generated instant accusations of hypocrisy against Genworth, as it concludes that first-time home buyers “are doing their homework and making responsible financial decisions entering the housing market.” But just days ago, Genworth hiked its mortgage insurance rates by 15 per cent for home buyers with small down payments.
The survey “appears to contradict its latest move to increase costs for those same buyers,” Mortgage Broker News wrote.
Indeed, the survey found that the average down payment for a first home is 12 per cent nationally. It falls as low as 8 per cent in Atlantic Canada. In Toronto and Vancouver, where down payments average 21 and 20 per cent, respectively, buyers are getting help from parents more than in other markets, Genworth said.
And the survey appears to confirm what many suspected: First-time home buyers today are wealthier than average.
Nearly a third of first-time home buyers in the survey had a household income above $100,000, the survey found. In Toronto, 40 per cent of first-home buyers had an income above $100,000, followed by Calgary at 39 per cent. That falls to 24 per cent in Montreal and 21 per cent in Atlantic Canada.
The survey of 1,800 Canadians was carried out by Environics between Feb. 5, 2015, and March 4, 2015.
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