cdr108
Senior Member
http://www.yourhome.ca/homes/article/640875
May 27, 2009
Comments on this story (20)
Tony Wong
Canadian first-time home buyers are a cautious lot, but they will strike if the price is right.
While the economy remains a huge concern, lower prices and interest rates are spurring them to buy in the spring market, according to a report released yesterday by Royal LePage Real Estate Services.
According to a poll by Pollara Research, done for Royal LePage, 86 per cent of Canadians say lower interest rates make them more likely to buy a home. Eighty-one per cent say lower prices are another motivating factor.
But the economy remains a stumbling block, with 76 per cent citing job security and 64 per cent saying a stable economy are important factors in their buying decisions.
"The true impact of job loss is understated because, beyond the 8 per cent unemployment rate, you have a section of the population who are concerned about their jobs, and that is feeding into their choice to buy a home," Royal LePage CEO Phil Soper said in an interview.
Still, some buyers have returned to the market this spring. A first-time homebuyer's tax credit and a home-renovation tax credit for 2009 have been cited by potential purchasers as influencing factors.
First-time buyers are key to the market because they allow move-up buyers to sell their homes while continuing up the housing chain to more expensive properties.
"The proof in the pudding will be whether we see if demand is sustainable to summer and early fall," Soper said.
So far, Canadian developers have avoided a disastrous spring, with new-home sales down by 26 per cent in April compared with last year, representing the slowest deceleration in six months. Sales totalled 1,880 in April, compared with 2,541 the year before, according to figures released yesterday by the Building, Industry and Land Development association.
Still, year-to-date sales are down by 52 per cent compared with 2008.
Toronto existing-home prices have also been surprisingly resilient, down by less than 1 per cent from the same period last May.
By contrast, in the United States, the Case-Shiller housing price index reported yesterday that homes have now lost an incredible 32.2 per cent in value since the correction.
In the Toronto market, condominiums remain the preferred choice of many first-time buyers based on affordability.
Some buyers are gravitating to condos built within the past five years, "questioning the viability of new build projects within the current economic climate," LePage said, as some buyers worry that some projects will not be started due to poor sales.
The typical first-time buyer is 25 to 30 and willing to spend up to $400,000 on a home for couples. Singles, mostly women, are purchasing within the $250,000 to $300,000 range according to the real estate company.
Developers say new projects are still selling, but there is uncertainty in the market over a proposed harmonized sales tax in Ontario, which would meld the GST and PST and push up the prices of homes selling for more than $400,000. Builders say the new tax could bump up costs by as much as 6 per cent on sales in a given project, making some developments unfeasible.
"We have a situation where I have no idea what to tell my customers if they are going to get hit with the tax," said Frank Giannone, president of the Ontario Home Builders' Association in a meeting this week with the Star's editorial board.
Giannone said he is about to launch a development in Don Mills, but uncertainty over the tax is causing buyers to hesitate.
The builders' group wants the province to give an exemption to buyers signing sales deals before next July, when the tax is to be implemented. Under the proposed tax, homes under $400,000 are exempt from the tax, while homes between $400,000 and $500,000 will pay a portion. Homes over $500,000 bear the full brunt.
May 27, 2009
Comments on this story (20)
Tony Wong
Canadian first-time home buyers are a cautious lot, but they will strike if the price is right.
While the economy remains a huge concern, lower prices and interest rates are spurring them to buy in the spring market, according to a report released yesterday by Royal LePage Real Estate Services.
According to a poll by Pollara Research, done for Royal LePage, 86 per cent of Canadians say lower interest rates make them more likely to buy a home. Eighty-one per cent say lower prices are another motivating factor.
But the economy remains a stumbling block, with 76 per cent citing job security and 64 per cent saying a stable economy are important factors in their buying decisions.
"The true impact of job loss is understated because, beyond the 8 per cent unemployment rate, you have a section of the population who are concerned about their jobs, and that is feeding into their choice to buy a home," Royal LePage CEO Phil Soper said in an interview.
Still, some buyers have returned to the market this spring. A first-time homebuyer's tax credit and a home-renovation tax credit for 2009 have been cited by potential purchasers as influencing factors.
First-time buyers are key to the market because they allow move-up buyers to sell their homes while continuing up the housing chain to more expensive properties.
"The proof in the pudding will be whether we see if demand is sustainable to summer and early fall," Soper said.
So far, Canadian developers have avoided a disastrous spring, with new-home sales down by 26 per cent in April compared with last year, representing the slowest deceleration in six months. Sales totalled 1,880 in April, compared with 2,541 the year before, according to figures released yesterday by the Building, Industry and Land Development association.
Still, year-to-date sales are down by 52 per cent compared with 2008.
Toronto existing-home prices have also been surprisingly resilient, down by less than 1 per cent from the same period last May.
By contrast, in the United States, the Case-Shiller housing price index reported yesterday that homes have now lost an incredible 32.2 per cent in value since the correction.
In the Toronto market, condominiums remain the preferred choice of many first-time buyers based on affordability.
Some buyers are gravitating to condos built within the past five years, "questioning the viability of new build projects within the current economic climate," LePage said, as some buyers worry that some projects will not be started due to poor sales.
The typical first-time buyer is 25 to 30 and willing to spend up to $400,000 on a home for couples. Singles, mostly women, are purchasing within the $250,000 to $300,000 range according to the real estate company.
Developers say new projects are still selling, but there is uncertainty in the market over a proposed harmonized sales tax in Ontario, which would meld the GST and PST and push up the prices of homes selling for more than $400,000. Builders say the new tax could bump up costs by as much as 6 per cent on sales in a given project, making some developments unfeasible.
"We have a situation where I have no idea what to tell my customers if they are going to get hit with the tax," said Frank Giannone, president of the Ontario Home Builders' Association in a meeting this week with the Star's editorial board.
Giannone said he is about to launch a development in Don Mills, but uncertainty over the tax is causing buyers to hesitate.
The builders' group wants the province to give an exemption to buyers signing sales deals before next July, when the tax is to be implemented. Under the proposed tax, homes under $400,000 are exempt from the tax, while homes between $400,000 and $500,000 will pay a portion. Homes over $500,000 bear the full brunt.
