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First time home buyers in B.C. choose condos
- TD Canada Trust releases 2010 Home Buyers Report -
TORONTO, July 5 /CNW/ - Condos narrowly edged out detached homes in B.C. as the number one choice for first-time homebuyers, in contrast to the rest of the country. Thirty-seven per cent of B.C. home buyers bought or intend to buy a condominium (versus 21% nationally), while only 36% bought or intend to buy a detached home (versus 58% nationally). 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.
Nearly all B.C. home buyers are making informed financial decisions before buying their home. Top activities include learning about mortgage options (94%) and getting pre-approved (93%). Interestingly, people in B.C. are most likely in the country to arrange for a home inspection (89%). Still, B.C. buyers felt unprepared for land transfer tax, legal fees and closing costs (56%, 55% and 53% respectively).
Eighty-nine per cent of first time buyers in B.C. took out or expect to take out a mortgage for their home. But, compared to the national average, many homebuyers in B.C. plan to have more than a 20% down payment (38% vs. 30% nationally). Only the remaining 62% will require their mortgage to be insured by organizations like the Canada Mortgage and Housing Corporation (CMHC). Nonetheless, B.C. homebuyers are the most concerned in the country about being able to afford their homes if interest rates rise (70% versus 59% nationally).
"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 and 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."
Nine-in-ten British Columbians report putting down as much of a down payment as they can afford. They are among the most likely to have saved the longest for a down payment; one quarter (26%) say they saved or intend to save for 5 years or longer for the down payment.
Sixty-four per cent of British Columbians expect to pay less than the asking price for their home. One-third (33%) expect to pay asking price and only 3% expect to pay more than asking price.
Nearly three-quarters of those surveyed in British Columbia 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 B.C. residents want?
If two homes were the same price, British Columbians would prefer a newer home (76%) to an older home (24%), and they prefer a smaller home, close to work (56%) to a larger home that requires a commute (44%).
Price of the home is the most important factor when considering what kind of home to buy in B.C. (100%), followed by layout of the home (97%) and features of the home (96%).
Home shopping process:
People in British Columbia consider all of their options before buying. On average B.C. buyers spend 8 months looking for a home and view almost 15 homes before buying. Though they consider their options before buying, B.C. residents are least likely say they will never move and they are most likely to plan to spend less than three years in their first home (15% vs. 11% nationally).
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 131 from British Columbia. All participants either purchased their first home within the past 24 months, or intend to purchase their first home within the next 24 months.
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 more than 18 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, including 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 6 million online customers. TD Bank Financial Group had CDN$574 billion in assets on April 30, 2010. The Toronto-Dominion Bank trades under the symbol "TD" on the Toronto and New York Stock Exchanges.
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