More than half of young potential homebuyers in Canada think they are better off waiting until next year, according to a new survey, effectively contradicting the observations of brokers.
The results of the 18th annual RBC Homeownership Study found 55 per cent of young respondents, ages 18-34, believe it makes sense to delay a home purchase until 2011, about 10 percentage points higher than the national average. Additionally, 46 per cent of younger homeowners say mortgage costs were using up too much of their income.
In the Canadian housing industry, youth matters, with the poll finding younger respondents were much more likely to buy a home in the next years than the national average, at 46 per cent compared to 29 per cent of all respondents.
“In a more balanced housing market, it makes sense that younger and first time homebuyers are waiting to assess all of their options and do their research before buying a home,” said Bernice Dunsby, director of client acquisition, home equity for RBC.
That doesn’t necessarily reflect what brokers are seeing.
“We’re finding that most of our purchase applications are young first-time homebuyers with minimal down payment,” Michael Di Stefano, co-owner of Dominion Lending Centres - BTB Mortgage Solutions, in Niagara Falls, told MortgageBrokerNews.ca. “In fact, in some cases, they have only 3 percent and we’re adding the cash-back mortgage product to get them up to 5 per cent or to assist with their closing. They’re eager young people who want to stop spending $1,200 on rent and want to put that on a mortgage.”
It’s a similar story in the greater Halifax area, said one mortgage professional.
“I’m right on target for the same number of young first-time homebuyers this year as I have had in past years,” Bob Goudey, senior mortgage advisor with TMG The Mortgage Group Goudey Paon Mortgage House. “At this point they are driving the market.”
The RBC poll also suggests that younger Canadians are less likely to rely on real estate agents. Some 55 per cent of younger respondents said they would rely on real estate websites, 48 per cent said family, and 35 per cent said friends. Of the mid-range and 55-plus respondents, nearly three of four said they would rely on the advice of a real estate agent as their first choice for advice.
Increasingly, Brokers are themselves turning to the Internet to win those young buyers.
“We find that they’re going online to do their research,” Goudey told MortgageBrokerNews.ca, “but they’re still being driven to us by our marketing efforts, which largely focus on young buyers.”