Canadian homebuyers more experienced, financially prudent moving forward, says RE/MAX
Move-up purchasers set to increase their stake in homeownership in 2013,
despite overall trend toward moderation, says RE/MAX
Against a backdrop of strong equity gains and lower interest rates, move-up buyers are once again set to ramp up their role in major Canadian housing markets.
That’s the key finding of the RE/MAX Move-Up Buyers Report 2013, which examined sales and trends at trade-up price points in 16 major centres throughout the country.
Serious average price appreciation over the past 10 years has been the primary catalyst, with compound annual growth led by Regina (11.57 per cent), Saskatoon (10.25 per cent), Winnipeg (10.03 per cent) and St. John’s (9.56 per cent).
Five-year appreciation was much more muted, with compounded rates of return hovering near five per cent in most centres. Regina and Winnipeg once again bucked the trend, posting increases of 12.7 and 8.39 per cent, while St. John’s posted a four-year compound annual gain of 11 per cent.
There’s no question that the equity position of Canadians has been remarkable. Yet, gains remain well outside of bubble territory, particularly in the often-cited markets of Vancouver and Toronto. And while Regina, Saskatoon and St. John’s have proven more robust, house prices are still playing catch up, given a stronger economic status and following years of steady, but modest growth. Overall, healthy fundamentals remain in place, as enthusiasm climbs among experienced home purchasers.
In fact, the report also noted that the time between moves has actually decreased among move-up buyers, with most now prepared to move within four to seven years of their original purchase. Why such confidence? The move simply makes sense. With today’s rock bottom mortgage rates, many are able to secure a larger home and/or better neighbourhood, while taking on carrying costs just slightly higher than their original payment.
Inventory has played a role drawing out buyers in centres such as Vancouer, Victoria, Kelowna and Saint John, where buyer’s market conditions and—in some cases—softer pricing have created ideal opportunities. Tight inventory levels, meanwhile, are hampering activity to some extent in Edmonton, Calgary, Regina, Saskatoon, Winnipeg, Toronto proper, Hamilton-Burlington and pockets of St. John’s. Unless conditions improve, continued upward pressure on pricing is expected in the months ahead, but even that is prompting some to act sooner rather than later.
The supply crunch has created a bit of a catch-22 in some markets, as homeowners hold off listing their current home, concerned they won’t find an ideal home to trade up to, ultimately exacerbating the inventory issue.
Yet, on the whole, the outlook remains positive, with Kelowna, Edmonton, Calgary, Winnipeg, Toronto, Hamilton-Burlington, and London-St. Thomas demonstrating solid move-up activity out of the gate in 2013.
Move-up buyers remain firm in their belief that homeownership is a sound investment. Most realize that very few financial vehicles provide the security and dual purpose that homeownership affords. They also realize that opportunity is not finite—one reason that move-up markets remain well-positioned for the year ahead.See the full press release at:
Re/Max Press Release