Photo: Matthew Hurst/Flickr
First-time home buyers will help prop up home sales in the Greater Toronto Area for the rest of the year and 2016, suggests a RE/MAX Hallmark Ltd. survey released today.
“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,” said Ken McLachlan, co-owner of RE/MAX, in a statement. “What we found was the key to the underlying strength of the overall market – a healthy first-time buying segment.”
Of survey respondents who were “seriously intent” on entering the GTA housing market over the next year and a half, 32 per cent were would-be first-time buyers.
Among all first-time buyers surveyed more than half were Millennials — 57 per cent fall within that 18-34 age range — and 41 per cent were single. Fifty-eight per cent are currently renting, and on average, these home buyers plan on spending $455,000 on a home, with 22 per cent of that going towards a down payment sometime in the next 18 months.
Meanwhile, over 50 per cent of would-be first-time buyers responded to RE/MAX’s GTA Homebuyers Survey saying they will make use of the federal government’s Home Buyer’s Plan. The program lets people withdraw a maximum of $25,000 from their registered retirement savings plans in a year for the purposes of buying or building a home.
In addition to the government program, the largesse of buyers’ relatives is also expected to play a part in housing activity. A quarter of prospective first-time buyers cited family assistance or a gift as something that will help them with their purchase.
As for where they plan on settling down, 61 per cent of first-time buyers are eyeing homes within the City of Toronto’s borders, despite it being one of the most expensive markets in Canada.
A majority of these 416 aspirants will likely have to look to the condo market, RE/MAX says, although that doesn’t necessarily mean settling for some. Although 56 per cent of first-time buyers reported their preference was a detached home, condos came in at second with 44 per cent preferring this housing type.
And although Toronto drew the attention of most first-time buyers, 39 per cent are looking beyond the 416.
Regardless of where they intend on making an offer, a vast majority of first-time buyers surveyed — 84 per cent — think purchasing a home is a solid financial move.
Between September 22nd and 28th, REMAX surveyed 505 people who are GTA residents, plan to buy property in the area over the next year and a half, and are aged 18 and older. The survey was conducted using the Angus Reid Forum, an online market-research community.
“The emphasis that Millennials, in particular, place on homeownership is especially interesting,” said McLachlan in the statement.
“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.”