A recent poll conducted by Environics Research Group for TD Canada Trust reveals, not surprisingly, that the majority of urban Canadian condo buyers are first-time home buyers.
Environics polled 806 people in Montreal, Toronto, Calgary and Vancouver who have bought a condo in the past 24 months or intend to buy a condo in the next 24 months. Results revealed interesting attitudes among participants under the age of 35.
For example, under-35 buyers surveyed don't plan to stay in their condos long: 45 percent plan to move after four to six years and 22 percent don’t intend to stay more than three years.
Despite extensive media coverage of Federal changes to mortgage lending rules, 39 percent of survey respondents under age 35 who are planning to buy a condo were not aware of these changes, which could significantly impact their buying options and payments.
The survey also found that, for younger respondents, affordability is the biggest driver in choosing a condo and two-thirds of young urban Canadians would rather buy a house. The opposite is true for the over-50 age group surveyed, who are thinking about downsizing.
The survey results beg the question: “Are young home buyers being realistic about home ownership?” In today’s market, there are likely investment advisors who would strongly caution first-time buyers against buying condos with the assumption that they will have enough equity to ‘trade up’ to a more expensive home after only a few years.
Maintenance and amenity fees combined with monthly interest payments must be factored in when considering the purchase of a condo. The higher these payments - the less equity you could be building over the short term.
Perhaps it is the unbridled pace of growth and low interest rates that have influenced a belief that profits can be made quickly in real estate. Those who got in at the bottom of the real estate boom saw great returns on investment; but like everything else, markets are cyclical. Over-leveraging yourself on the assumption you can turn around and sell your home quickly can be dangerous.
With lending rates predicted to rise, using a mortgage broker to shave even a few points off your mortgage rate and maximizing your down payment can add up to big savings over the life of your mortgage, not to mention smaller monthly payments. This means less money going to pay off interest and more going into your pocket.
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Constantine Isslamow | Broker of Record
CENTURY 21 United Realty Inc. Brokerage
387 George Street South, P.O. Box 178
Peterborough Ontario. K9J 6Y8
Direct Line: 705.743.4444 | Fax: 705-743.3702
Constantine.Isslamow@gmail.com
www.ConstantineIsslamow.com
hmmm.That seems to be an alarming one. One home buyers, whether a condominium or any property buyers should have its learning with regards to the different rules associated within the business. At some point, it is the home buyer who will have regrets in the end.
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