TORONTO - Low mortgage rates and more affordable homes in many markets are pushing first-time home buyers to enter the market in droves, Canadian real-estate experts say.
Phil Soper, president and chief executive of Brookfield Real Estate Services (TSX:BRE.UN), said that when the Canadian housing market was hot, bidding wars forced many buyers to put in offers without conditions to increase their chances of being accepted.
This, combined with unprecedented increases in home prices in many parts of the country, scared many first-time buyers out of the market, he said.
"When first-time buyers stop entering the market it's like sand in the gears of the housing market," said Soper, speaking Tuesday at a BMO conference on the current and future state of Canada's housing market.
But he said the economic downturn changed all that. As housing prices fell across the country and lenders lowered their mortgage rates to attract borrowers, the market became much more attractive to people looking to buy their first homes.
"The uptick in first-time home buyer purchases across the country is quite astonishing," Soper said.
David Pylyp; What an incredible reversal of the doom and gloom that has overwhelmed the Media in Toronto. When all has been said and done Brad Lamb sums it up for Toronto by saying "There's a fair amount of evidence out there that the market has bottomed and is starting to come back," Lamb said, adding that while prices may not fall any further, they probably won't rise in the near-term either.
I share the same sentiment. People are looking for 50 % off sales and not finding them. Those [buyers] holding off have been rewarded with home sellers holding back with their property listings. Buyers will start to see a trend shortly. There does not seem to be a glut of inventory available and that results in lower than expected vacancy rates.
Bob Dugan, CMHC's chief economist, in a release said "These factors have put downward pressure on vacancy rates over the past year."
There may be hope for us yet! What are your thoughts? Do you agree or disagree? Where do you think we are going?