Welcome guest.  ( Sign in )

First Time Real Estate Buyers making Larger Down Payments

February 23, 2017 - Updated: February 23, 2017

Are first time home buyers finding more money to use as a down payment? The simple answer is yes! Where is this money coming from? We will break it down for you.

 

 

Canadian real estate prices have been skyrocketing, leaving a number of questions about affordability. The common assumption is that first-time buyers are deteriorating, but a survey from Mortgage Pros Canada might indicate otherwise. The national mortgage industry association’s chief economist William Dunning prepared a report on the state of the residential mortgage market. It notes that first-time buyers have a record amount of equity in their homes, and apparently borrowing for a downpayment has always been normal in Canada.

 

% Down-Payment Reaches An All Time High

Despite sky high home prices, first time homebuyers in Canada are putting more money down than ever. Dunning notes that from 2014 – 2016, first-time buyers averaged a 23% down payment. This is an all time high, trumping pre-1990 buyers that averaged 22%. Unfortunately the data isn’t separated into regions, but the trend moving generally higher is promising… on the surface at least.

 

Bank Of Mom And Dad

The majority of people used personal savings for their down payment, but there were increases of informal loans. 51% of of people used their own savings, a number not seen since before 1990 when the rate was 54%. This was followed by loans from a financial institution (19%), and the “Bank of Mom and Dad.” The last one is interesting, because it brings up the question, where did Mom and Dad pulled that money from? If it’s through a HELOCs or diverted from their retirement investments, this could be eroding existing homeowner stats.

Source Of First-Time Buyer Down Payments

Source: Mortgage Pros Canada.

 

Changes To Look Out For

Even though it’s an “annual report”, the data ends at the third quarter of 2016. In any other year, it wouldn’t be a significant change, but last year new down payment rules were rolled out in the fourth quarter. New restrictions on how down payments are made, and how much can be borrowed are likely to have a significant impact on where downpayments are born.

Once again, it’s unfortunate that these numbers weren’t broken down regionally. It’s pretty easy to see a 23% down payment in a market like St John’s, where that would work out to $69,419 (a large but realistic number). In a place like Vancouver however, that’s $201,995 – which will probably take a teensy bit longer to save up. So there’s probably a bit of a data skew there. Tune in next week where we’ll dive into where the heck parents are getting this money from.

 

Visit us at Durham Bungalows.ca for all your Real Estate needs! 

 

 

source: https://betterdwelling.com/first-time-canadian-real-estate-buyers-are-making-record-down-payments/


Tagged with: real estate first time buyer down payments
| | Share

Boost your Credit Score regardless of age.

Originally posted on: April 26, 2018
Filed under: credit credit score
Credit scores are important. Many people are taking more time to review their scores and finding ways to improve them, especially younger consum ...

Green Ontario Fund Energy Rebates

Originally posted on: April 10, 2018
Last updated on: April 10, 2018
Filed under: green on greenon energy
If you have not heard of this, it is a Government Program to entice us to have a smaller carbon footprint and reduce energy costs. There are dif ...

History of Easter

Originally posted on: March 29, 2018
Last updated on: March 29, 2018
Filed under: easter history
Happy Easter Weekend! The Ancient Pagan Origins of Easter ...

How to protect your information.

Originally posted on: March 2, 2018
Last updated on: March 2, 2018
Filed under: online password protection
Many of us spend a lot of time online. We shop, use social media to connect with family and friends, send personal and business emails, pay bill ...

History of Valentine's Day

Originally posted on: February 14, 2018
Last updated on: February 14, 2018
Filed under: history valentine valentines
Happy Valentine's Day Everyone, If you have ever wondered how Valentine's Day start here is an article that goes over it. Plea ...
Sales Representative


Durham Bungalows
Brokerage
Independently owned and operated.

420 Green Street #105
Whitby, ON L1N 8R1


Phone: 1-289-274-2273
Powered by Lone Wolf Real Estate Technologies (CMS6)