Tips for First-Time Home Buyers

Posted by Loc Chau August 09, 2018

 

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First time buying your home involves considerable sacrifice in order to save up for the deposit and finding a home to suit your needs,  how about which mortgage term and rate to choose. At montrealhome, we put up a step-by-step guide to be your unique home buyer manual.

If you are looking forward to one day being a home owner, chances are you are starting to plan for that purchase today. Purchasing your first home is one of the most exciting experiences you will have in your life, and is one of the largest purchases you will ever make. While everyone is generally on a different path, knowing what the average first-time homebuyer in Canada looks like can certainly help in knowing whether you are ahead of the game or slightly behind.

June 2018 MLS Home Price Index Price

First-time Buyers Down Payment In 2018

Montreal real estate market forward 2016

MONTREAL — Montreal housing sales may not be booming like Canada’s other largest cities, but they did rise by five per cent last year — the first time the city has seen an increase since 2010 and a trend the Quebec Federation of Real Estate Boards expects to continue through 2016.

The QFREB says this uptick in residential real estate sales for Canada’s second-largest city is largely the result of historically low interest rates encouraging prospective buyers to take out mortgages, coupled with an improvement in Montreal’s job market in spite of Canada experiencing a recession during the first two quarters of 2015.

“The residential real estate market’s upturn in 2015 will continue in 2016, at least during the spring period, which is the most active time of the year for buying a property,” said Paul Cardinal, manager of the QFREB’s Market Analysis Department after presenting results in Montreal last Thursday.

There was also a three per cent bump in Montreal-area housing prices, to an average of $295,000, a timid increase compared toToronto and Vancouver, Canada’s first- and third-largest cities, where  prices rose last year by 9.8 per cent and 18.9 per cent, respectively, according to the cities’ real estate boards.

Single-family units are expected to increase in price by another two per cent in 2016.

Montreal also seems to be settling into its condominium market, where an oversupply has created a buyer’s market that is expected to result in only a one per cent increase in 2016 prices.

The good news, Cardinal says, is that Montreal condominium starts dropped by 25 per cent in 2015, which will allow the market to absorb some of the oversupply.

Cardinal says that unlike Vancouver and Toronto, Montreal does not have a large number of customers purchasing properties as investments, though the city could offer opportunities to foreign buyers.

“Because the Canadian dollar is very low right now it could be an advantage for someone who comes from another country,” he said.

Analysts are not quite as optimistic about 2016. Desjardins expects Quebec housing sales will increase by two per cent this year, while RBC predicts a rise of just 0.5 per cent.

All of this, they say, relies on economic performance in the coming year, which may be buoyed by stronger U.S. import demands at a lower Canadian dollar. This is something that could be beneficial to the relatively large amount of export-focused manufacturing in the Montreal area.

“If there was a market correction, banks could become very cold,” said Robert Hogue, a senior economist at RBC.

The Average First-Time Homebuyer by Province in 2014

Homebuyers are vastly different based on the province they live in. The average home prices compared to the average amount spent by first-time homebuyers in a province helps to illustrate the cost of living and affordability in each of Canada’s provincial regions.

The average home in Atlantic Canada is $212,622, while the average first-time homebuyer  spends $204,400.

      • The average home in Quebec is $263,661 while the average first-time homebuyer spends $222,300.
      • The average home in Ontario is $423,691, while the average first-time homebuyer spends $358,400.
      • The average home in Manitoba and Saskatchewan is $275,104 while the average first-time homebuyer spends $226,100.
      • The average home in Alberta is $407,540, while the average first-time homebuyer spends $364,700.
      • The average home in British Columbia is $611,688 while the average first-time homebuyer  spends $430,300.

The question you need to pose to yourself is – how prepared are you? If you already have a larger deposit saved, perhaps you can invest in a slightly better property. If you are behind the average, consider services like Genworth’s down payment options.
 

In 2013 the Average First-Time Homebuyer in Canada has three unique characteristics:

  1. They are generally in their late 20s. In a study conducted by BMO in 2013, which surveyed 2000 first-time home buyers, the average homebuyer was determined to be about 29 years old.
  2. They buy a home valued at $316,100 on average. In 2013, this number is different in major cities, such as Vancouver where the average is $506,500, Toronto at $408,300, Calgary at $363,400 and in Montreal where the cost is less than the national average at $237,900. In 2016, Montreal housing sales may not be booming like Canada’s other largest cities, but they did rise by five per cent last year — the first time the city has seen an increase since 2010 and a trend the Quebec Federation of Real Estate Boards expects to continue through 2016.first time buyer guide - BMO average home price 2013-2015 722 x 300
  3. On average, a first-time homebuyer in Canada has $50,576 to put towards their down payment. This means that the average homebuyer has about 16% of the cost of the home, meaning they need to insure their mortgages with an insurer like Genworth (as mortgage insurance is required when a buyer has less than a 20% down payment).

There are a lot of information from the press, from the banks, from the real estate agencies

Buyers are overloaded with information which confuse more than inform, read on for a step-by-step home buyer guide …