A new survey released by BMO says first-time home buyers generally have a positive outlook on the housing market.

The survey, conducted by Pollara Strategic Insights, found:

  • Across Canada, first-time buyers in Alberta are the most optimistic with over 50 per cent believing it is a good time to buy.
  • Home buyers in British Columbia and the Prairies are also fairly optimistic about the market (42 per cent in both regions).
  • Not all buyers share this same sentiment. Only a third of prospective buyers in Ontario believe now is the right time to purchase a home, and less than 40 per cent of first-time buyers in Quebec believe the current market favours buyers.

BMO Economics says the housing market “is showing signs of firming again and eight out of 11 of Canada’s larger cities are currently either buyers’ markets or balanced: Vancouver, Victoria, Calgary, Edmonton, Regina, Saskatoon, Winnipeg and Toronto. As well, the First-Time Home Buyer incentive is expected to provide a moderate lift to sales. Taken together, it is creating an environment of stronger consumer demand for housing.”

The survey found that 13 per cent of first-time home buyers say they plan to buy a property that exceeds more than 30 per cent of their income. Close to 40 per cent of first-time buyers are willing to make sacrifices in other areas of their lives to buy a more expensive home.

First-time buyers are also optimistic when it comes to the federal government’s First-Time Home Buyers Incentive. Of those surveyed, 86 per cent believe that the incentive will be useful towards achieving their home ownership goals.

“While first-time home buyers believe that market conditions are favourable for buyers, it’s important to make sure that carrying the costs are sustainable,” says Hassan Pirnia, head of personal lending and home financing products at BMO.

With a five-per-cent down payment as the minimum, 26 per cent of first-time home buyers surveyed say having enough money to meet this threshold will be a major challenge, while 39 per cent indicate it will be a minor challenge.

The report also says that prospective home buyers range in financial preparedness. Only 14 per cent of new home buyers are already in a position to make a down payment, and over half (55 per cent) say they expect to have the money for a down payment in the next two years. As well, most first-time buyers will be carrying debt into homeownership. Just 38 per cent say they will be debt-free before they purchase their first home.

“Purchasing a home is a major milestone, but it is important to consider how home ownership will impact day-to-day finances and short-term and long-term financial plans,” says Pirnia. “We encourage new homebuyers to familiarize themselves with the various tools and resources available like BMO’s payment and affordability calculators. They will help to provide a full picture of costs and determine financial comfort levels.”


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