More than half the homes sold in Canada last year were to first-time buyers, according to CAAMP. If you want to get a bit more technical, that's 55% of all sold, which translates to a total of about 251,535 using CMHC's 457,338 figure of all homes sold in Canada in 2013.
But typically what are the characteristics of these new homeowners? The Bank of Montreal's research indicates these new buyers are in their late 20's with an average age of 29 and generally pay about $316,100 for the first home.
Of course, if you know about the cost of homes in some of the larger cities in Canada, you realize that those average figures will climb much higher to $506,500 in Vancouver and nearly $408,300 in Toronto. Calgary residents should expect to spend $363,400 and in Montreal the cost drops down considerably from the national average to an eye-pleasing $237,900.
A twenty percent down payment for the average home is just over $63,000, but as it turns out, on average a first-time homebuyer puts down about $50,576, which is about 16% of the total cost, meaning homeowners insurance must be purchased.
As you can see, there is often quite a disparity between budgets and actual home costs. For example, the average house price in Toronto is $546,597, which exceeds the typical average budget by just over $138,000. This is likely a big reason why almost 60% of potential first-time homebuyers have had to delay their plans to buy, with about 40% saying that the increasing cost of real estate has led to a purchase delay.
Not surprisingly, parents and other family members are relied on to provide contributions to fund a new home by about 30% of the novice purchasers. In Vancouver and Montreal nearly 40% require that extra help.
Additional information from a recent Google Consumer Survey indicates that more than one-third of first-time homebuyers would prefer to take a longer amortization period on their mortgage, citing saving for retirement as the main reason for doing so. Also noteworthy, is that 35.9% of first-time buyers currently have a 25-year amortization, with 19.3% deciding on a 30-year term.
