canadian first time buyers rush to beat interest rate rises
News Posted On: 14 April 2011
According to estate agents REMAX, nearly a third of the 19 major Canadian markets are reporting a larger number of sales than this time last year, and 70% say that average selling prices have increased. Prices in greater Vancouver have increased by as much as 20% this year with Hamilton Burlington showing an 8% increase year-on-year, and Winnipeg, Toronto and Québec city are all reporting price increases.
Much of this activity is thought to be due to first-time buyers anxious to take advantage of low interest rates and also because of the changes to mortgage lending for new homeowners that are stricter with shorter terms. In general the Canadian economy is well placed with consumer confidence rising and fears of a double dip recession receding, and the residential property market is preparing for a busy spring.
One factor that may hamper the market is the lack of affordable housing for first-time buyers and those on low incomes. This is leading planners and developers to change their criteria towards building smaller condo units and homes. This demand for reasonably priced property is expected to grow in coming years.
Even though home ownership rates are at nearly 70% there is still room for growth in the market and it seems unlikely that buyers will be deterred by the higher cost of lending and housing. Canadians still believe strongly in home ownership and don't want to rent and pay someone else's mortgage. This means that starter homes will become more and more necessary for first-time buyers.
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