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Thanks to family help, younger Canadians feel more prepared to buy a first home than parents and grandparents did
<< TD Canada Trust Generational Homeownership Study reveals a shift in home buying behaviour >>
TORONTO, Oct. 19 /CNW/ - While homeowners of all ages agree that purchasing a house is a solid long term investment, there is a marked difference in today's 18-34 year old first time home buyers' actions and attitudes as compared to older generations aged 55+ when they were first time buyers of the same age.
Young Canadians aged 18-34 are more likely to feel they are financially ready to buy a house than their parents and grandparents were when they were purchasing their first home. What is motivating this belief? The TD Canada Trust Generational Homeownership Study reveals a trend by 18-34 year olds towards purchasing older homes and a significant increase in young homebuyers who are relying on financial assistance from family to make their home purchase a reality.
When asked what prompted them to consider buying their first home, just over half of younger Canadians (51%) said they felt financially ready compared to 37% of older Canadians 55+ when they were thinking of buying their first home. However, over a third of younger Canadians 18-34 (36%) said they could not have afforded their first home without help from family (compared to 16% of those 55+), and 27% said that they received money as a gift or borrowed from family/friends to put towards the purchase of their first home (compared to only 10% of those 55+).
Younger Canadians are buying older homes in urban centres
Location is the most important factor in buying a home for many younger Canadians. Seventy-eight per cent of those 18-34 years-old said that location was a top priority and 70% of Canadians ages 35-54 years-old agreed, compared to 64% of Canadians 55+. Sixty-four per cent of younger Canadian adults purchased their first home in a city, more than the older generations polled (35-54: 55%, 55+: 50%).
Buying a house even in the city is still preferred over condos or townhouses. Both younger Canadians (18-34) and Canadians 55+ revealed that their first real estate purchase was a house (65% and 88% respectively). For many younger Canadians life in the city also means older homes - almost half (48%) of Canadians 18-34 chose a house over 21 years old for their first home and 35% chose a home they planned to fix up (compared to 24% of 55+).
"A lot of people assume that younger Canadians buying their first home in a city would naturally choose the affordable condo option, but this study shows that this isn't the case," says Chris Wisniewski, Group Product Manager, Real Estate Secured Lending, TD Canada Trust. "Buying in the city often means choosing an older home that needs work, so many are looking at renovating soon after they purchase."
First Home Priorities
When today's Canadians 55+ bought their first home, paying off their mortgage was a top priority; more important than it is to today's younger homebuyers. Today, less than half of young Canadian adults (49%) agree that paying off their mortgage is a first priority, compared to 64% of Canadians over 55.
But for Canadians across all generations, their home is their biggest investment. Eighty-eight per cent of Canadian adults 18-34, 87% of Canadians 35-54 and 78% of 55+ all agreed that their first home was an investment for the future. Sixty-four per cent of younger Canadian adults 18-34 said that they put all their savings into their first home compared to 62% of Canadians 55+ and 54% of Canadians 35-54.
The research revealed that when it comes to getting a mortgage, young adults tend to shop around more than their older counterparts did. Sixty-two per cent of older Canadians were loyal to their own bank and received financing where they were already a customer, compared to 36% of younger homeowners who were more likely to shop around and take recommendations.
"There are so many different options available now, and easier access to information with the use of the internet, that it's no wonder today's first time homebuyer shops around a bit more," added Wisniewski. "It's a great idea to look around and see what's available. 30 years ago when people were looking for financing, they usually had limited choices. Now there are many options to explore with your bank including a variety of fixed rate mortgages, variable rate mortgages, and even green mortgages for buyers who want to lessen their footprint on the environment."
<< HIGHLIGHTS OF TD CANADA TRUST POLL FINDINGS: - 36% of younger Canadians 18-34 said they could not have afforded their first home without help from their family - Over half (51%) of younger Canadian adults 18-34 were considered to buy their first home because they felt financially ready compared to 37% of those 55+ - Almost a third of those 18-34 felt their first home was more expensive than they initially planned for (36%) while only 18% of older Canadians said that their first home was more expensive than they initially planned for >>
ABOUT THE TD CANADA TRUST GENERATIONAL HOMEOWNERSHIP SURVEY
The 2009 TD Canada Trust Generational Homeownership Survey was conducted through interviews with 900 adult Canadians across the country, to understand the behaviours and attitudes of Canadians across the generations when purchasing their first home between the ages of 18 and 35. The survey was conducted by Angus Reid Strategies between August 6 and 11, 2009. The sample size includes 300 men and women for each age group of 18-34; 35-54 and 55+.
About TD Bank Financial Group
The Toronto-Dominion Bank and its subsidiaries are collectively known as TD Bank Financial Group. TD Bank Financial Group is the sixth largest bank in North America by branches and serves approximately 17 million customers in four key businesses operating in a number of locations in key financial centres around the globe: Canadian Personal and Commercial Banking, including TD Canada Trust and TD Insurance; Wealth Management, including TD Waterhouse and an investment in TD Ameritrade; U.S. Personal and Commercial Banking through TD Bank, America's Most Convenient Bank; and Wholesale Banking, including TD Securities. TD Bank Financial Group also ranks among the world's leading online financial services firms, with more than 5.5 million online customers. TD Bank Financial Group had CDN$545 billion in assets on July 31, 2009. The Toronto-Dominion Bank trades under the symbol "TD" on the Toronto and New York Stock Exchanges.
For further information: Tashlin Hirani, TD Bank Financial Group, (416) 982-3375, Tashlin.firstname.lastname@example.org
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