The housing market generates a lot of economic activity in Canada. Not just home selling and buying and construction, but also for those industries connected to housing such as legal services, moving companies, landscaping companies, home improvement companies, etc.
Each year, approximately 620,000 households move into newly-purchased homes in Canada. Of those, about 45%, or 280,000, are first-time buyers, most between the ages of 25 and 34, and many in the 45 to 64 age group. Single-detached homes are the most popular house type purchased and accounts for 57% of all sales.
The average price is about $347,000 in Canada. The average down payment for first timers equals 21% of the price of the home. The Canadian Mortgage and Housing Corporation (CMHC) conducted an online survey looking at the home buying experiences of first timers.
Here are the highlights:
- Loans and gifts from parents and other family members account for 7% of down payments
- 3% of all down payment come from RRSP withdrawals
- 81% financed their purchase through a mortgage
- Fixed rates are the most common rates
- Most mortgages have five-year terms
Satisfaction
Seventy-eight per cent of First Time Homebuyers were satisfied with their experience working with a mortgage professional. And 43% said they would likely use a broker for their next mortgage. The one area that brokers seem to lag is in post transaction follow-up. Fewer than half of first-time buyers received any follow-up. With 18 years experience in client relations, the follow up is my speciality. I enjoy keeping in touch with my clients and want to know how they're doing. So, what did client's say the liked about follow up? Many of them said useful information including long term mortgage/financial strategies and advice on how to manage financial difficulties would be useful to them.
The mortgage industry is a competitive business. Mortgage professionals work with a wide variety of clients. They counsel and educate clients and help them understand the buying process. A broker also makes sure to understand what a first time home buyer needs and pays attention to both their financial goals and their personal goals – and not just in the short term. It’s not surprising that more home buyers are turning to mortgage brokers to help them navigate the daunting process of buying a home. That number will continue to grow as the mortgage industry, with its variety of options and products, becomes more complex; and as the needs and the profiles of first time home buyers continue to evolve.