First-time Home Buyers Saving for Larger Down Payments
Calmer heads prevail when it comes to first-time home buying, according to one poll that says there’s a rise in the number of first-time buyers who are slapping down more than 20 per cent for their down payments.
Fifty-six per cent of Canadians are squirreling away more money to make those down payments, up from 36 per cent last year, says the annual poll by Genworth Canada and the Canadian Association of Credit Counselling Services.
Among first-time home buyers, the proportion saving for less than two years has decreased by nearly 30 per cent, while the proportion saving for more than five years rose by more than 50 per cent.
“Canadians entering the real estate market are making financially astute choices by saving longer and putting down larger deposits on their homes,” Brian Hurley, chairman and chief executive of Genworth Canada, said in a statement.
“They continue to value homeownershipand are being responsible about the way they enter into mortgage debt. This trend bodes well for a soft-landing of the housing market.”
The federal government tightened mortgage rules last July in a bid to calm the housing sector. The move was the fourth in four years and forced consumers to get a grip on their debt by shortening the maximum mortgage length to make it harder to buy real estate.
On Tuesday, Canada Mortgage and Housing Corp released data that showed the housing market is continuing to cool.
The online survey was conducted on 1,514 Canadians by Environics Research Group in mid-February.
Separately, the Bank of Montreal released a survey on Tuesdaythat showed Canadians planning to buy their first home in the next five years plan to spend about $300,000, with an average down payment amount of $48,000 or 16 per cent.
Some 66 per cent of first-time buyers say the latest changes to mortgage regulations have not affected their buying timeline, while one-in-five say they will have to wait longer before buying as a result.
Six in 10 have made cutbacks to their lifestyle to save for their first home, with just one-in-four expecting their parents or other family members to help them pay for their first home, the BMO survey showed.