According to a report by RBC, four in 10 Canadians planning to enter the housing market within the next couple of years will be first time buyers.
The 20th Annual RBC Home Ownership Poll found the majority of Canadians are taking a wait and see approach to purchasing a home of their own with 15 per cent likely to buy in the next two years; a decrease of 12 per cent compared to 2012.
“The more cautious mood this year is not surprising and is consistent with broader economic and industry forecasts,” said Sean Amato-Gauci senior vice-president, Home Equity Financing, RBC. “An unseasonably warm spring, low rates and anticipation of mortgage rule changes may have led many Canadians to move forward their home purchases in the first half of 2012.
“Our findings suggest confidence in the housing market is still high and young Canadians are the bright spot as they look to buy their first home and seek the advice to do it right.”
Of the Canadians surveyed, 84 per cent believe a house or condominium is a good investment with Albertans showing even more confidence with 89 per cent saying purchasing a new home is a good investment.
While 47 per cent of those surveyed in 2012 believed house prices would be higher in 2013 that number decreased this year to 43 per cent, a number in turn that could be attributed to the 40 per cent of Canadians polled who believe the current housing market is in balance compared to 36 per cent in 2012.
The poll also showed 75 per cent of Canadians feel recent government changes to mortgage rules will impact or delay prospective homebuyers from getting into the market. Almost 60 per cent of Canadians polled said a minimum five per cent down payments and a shortened amortization period had little to no impact.
In June 2012, it was announced the maximum amortization period would be reduced from 30 years to 25 as well as the amount Canadians can borrow when refinancing their homes decreasing from 85 to 80 per cent of the value of the home.
In better understanding mortgages, 76 per cent of Canadians polled by RBC turn to their banker for mortgage advice while 40 per cent say the bank is their primary source of information when looking for advice on financing a home purchase.
“With all the ambiguity on the market, Canadian homebuyers, especially first time homebuyers, are looking for trusted advice,” said Amato-Gauci.