First-time buyers driving real estate market

Posted: September 18, 2009 in All Blogs, Buyers, General Information

First-time homebuyers are being lured into the real estate market by falling prices, lower interest rates, more selection and new government incentives, a new report says.

Preliminary figures show house sales were up in February, after a terrible January, driven by more first-time buyers entering the market, the ReMax real estate company said yesterday.

ReMax said lower prices and record low lending rates are prompting many first-time buyers to “get off the fence, out of rental, and into the market.’’

“While a sense of caution still prevails, more and more first-timers are finding it hard to pass up the chance to become homeowners in today’s buyer-centric real estate climate,’’ ReMax said in its report.

The company’s analysis reflects the recent experience of the Kitchener-Waterloo Real Estate Board.

Although house sales in Kitchener and Waterloo fell 27 per cent in February compared to the same month a year earlier, sales in the $175,000 to $200,000 price range — the domain of first-time buyers — rose eight per cent.

ReMax said 22 of the 32 markets in the survey “remain firmly in buyer’s market territory.’’

They include Vancouver, Victoria, Edmonton, Calgary, Saskatoon, Regina, Ottawa, Toronto and Halifax. Markets such as Kitchener and Waterloo, Winnipeg, Sudbury, St. John’s, N.L., and Charlottetown had “more balanced conditions’’ between buyers and sellers, ReMax said.

The company said 40 per cent of the 32 markets had single-detached homes priced under $200,000. It said the starting price for single-detached homes in Kitchener and Waterloo has dropped to $245,000 from $260,000 a year ago. For condo apartments, it has slipped to $135,000 from $145,000.

Scotiabank economist Adrienne Warren said first-time homebuyers can be an indicator of a market recovery. “In any recovery you need to have first-time buyers because other buyers are just shuffling around housing. For a buyer that wants to move up, you need that first-time buyer to come in and buy from them.”


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