Tuesday, November 16, 2010

Home Sweet Home – for now: one-in-five Canadians own more than 5 homes in their life time

TD Canada Trust releases 2010 Repeat Home Buyers Report

There is no place like home, but for many Canadians, buying a home doesn’t mean they plan to stay for long. In fact, one-in-five repeat buyers have owned more than five homes. Twenty-three per cent of those surveyed plan to move again within six years according to the TD Canada Trust Repeat Home Buyers Report, which surveyed Canadians who have either purchased or intend to purchase a home that was not their first home. Less than one-third say their next move will be their last.

Canadians are split on whether their next home will be larger (49%) or smaller (51%), but there is consensus that in their next house-hunt, they intend to find a fully detached home. Seven-in-ten repeat home buyers are looking for a fully-detached home – even those currently living in condos, townhouses or semi-detached homes are looking for fully-detached homes for their next purchase.

Financing their new home

Half of Canadians say the proceeds from the sale of their current home will be less than the value of their new home, meaning that they will need to take out a mortgage (51%).

Most home buyers will try to save money on their mortgage. Eighty-three per cent will put down as much as they can afford for a down payment. A further two-thirds say they will save on interest payments by choosing accelerated payments (weekly or bi-weekly instead of monthly). Sixty-one per cent will save on interest payments by choosing a shorter amortization period for their mortgage. Still, 21% say they will take out the maximum mortgage that they qualified for from their bank (this increases to 28% of those under 40).

“It is encouraging that the majority of Canadians are taking steps to save money on their mortgage,” says Farhaneh Haque, Regional Sales Manager, Mobile Mortgage Specialists, TD Canada Trust. “I recommend that home buyers buy the house that fits their budget, not just their lifestyle. After all, if you buy a house that is too big for you to afford, you could be giving up that lifestyle just to pay it off.”

Mortgages for repeat home buyers

Two-thirds of repeat buyers have a mortgage on their current home; 72% intend to use their current lender when they purchase a new home. The top reasons for switching among the remaining 28% are better rates (60%), better customer service (33%) and better mortgage terms (28%).

“There are many options available to repeat home buyers and a mortgage expert can help you choose the right one to save money so you can own your new home faster,” says Haque.

The TD Home Buyers Report found that nearly 60% of buyers don’t know that they have options or haven’t thought about their options for their current mortgage. Haque offers these tips for buyers:

- Take your mortgage with you when you move. Many banks will let buyers take their mortgage with them, even if they need to increase their principal amount. This gets blended at the current market rate with the existing principal at its original interest rate.

- Use your mortgage as a selling feature. If the seller’s mortgage interest rate is lower than current market rates, the purchasers may be able to take on the seller’s mortgage when they move.

The TD Canada Trust Repeat Home Buyers Report showed that only one-third of repeat buyers bring their current mortgage with them to their new home and just 8% use it as a selling feature of their prior home, allowing the new owner to assume their mortgage.

Why buy another home?

The top factor that influences the decision to move is retirement (29%). Other factors include being bored of their current home (16%), investment opportunities (15%) and market conditions (15%). Fourteen per cent say they had always planned to move but were waiting to save enough money.

The top considerations for Canadians’ next home are the layout of the home (98%), the size of the home (97%) - though they are divided on whether to go smaller or bigger -- and price (96%).

Selling their current home

The majority of home buyers plan to sell their current property before purchasing another one (84%). Of the remaining 16% who will keep both properties, 39% will use one as a rental property or investment property (20%).

Those selling hope to improve the resale value of their home by renovating (54%) or redecorating (52%).

Fifty-five per cent of Canadian home buyers are cautious saying they wouldn’t buy a new home until their current home is sold – but 45% say they would put in an offer if the perfect home came up for sale and hope that their house sells.

Wednesday, November 3, 2010

Monthly Resale Housing Market Figures

Greater Toronto REALTORS® reported 6,681 sales through the Multiple Listing Service® (MLS®) in October 2010.

This represented a 21 per cent decrease compared to the 8,476 sales recorded in October 2009. Through the first ten months of the year, sales amounted to 75,582 – up one per cent compared to the January through October period in 2009.

“The annual change in sales and average selling prices has been quite uniform across the GTA and by property type as the market has balanced out from record levels of sales in the second half of 2009 and first few months of 2010,” said Toronto Real Estate Board (TREB) President Bill Johnston.

“The composition of GTA home sales does differ depending on location. Condominium apartments accounted for 42 per cent of total sales in the City of Toronto and almost 60 per cent of sales in TREB’s central districts,” Johnston continued. “In regions surrounding the City of Toronto, in contrast, low rise home types accounted for almost 90 per cent of transactions.”

The average price for October transactions was $443,729 – up five per cent compared to the average of $423,559 reported in October 2009. The average selling price through the first nine months of the year was $430,802.

“The average selling price in the GTA has continued to grow relative to 2009 because home ownership has remained affordable,” said Jason Mercer, the Toronto Real Estate Board’s Senior Manager of Market Analysis. “A household earning the average income in the GTA can comfortably afford the mortgage payments associated with the purchase of an average priced home.”

“The outlook for mortgage rates and income growth over the next year is favorable. The average home selling price could increase moderately next year and remain affordable for the average GTA household,” continued Mercer.