By the end of the first week of March 2011, six out of nineteen major Canadian real-estate markets reported increased sales compared to the same time last year. Over 70% of them confirmed that selling prices have increased as well. Western provinces’ real-estate markets are leading the charts as usual. Prices in the Greater Vancouver Area have grown by 20%, followed by Ontario’s Hamilton-Burlington area, reporting gains over 8%, with Winnipeg, Toronto, and Quebec closing in.
“With the Canadian economy on firmer footing overall, residential real estate is well-positioned moving into the traditionally busy spring market. Consumer confidence is climbing in conjunction with economic performance, and concerns over a secondary recession fade with each passing day. The mood is cautiously optimistic, as first-time buyers enter the market," says Elton Ash, regional executive vice president of RE/MAX of Western Canada.
First-time buyers are quickly moving in, wisely taking advantage of the lower borrowing costs compared to 2010. Most of them are trying to enter the market ahead of the changes the federal government announced regarding conditions for mortgage lending rules. The newly implemented set of rules will tighten criteria for new home owners. The maximum amortization period for government insured mortgages will be reduced from 35 to 30 years, and the amount people can borrow when refinancing their mortgage limits is down from 90% to 85% of the home value. These are just some of the upcoming changes.
Recent surveys show that first-time purchasers have begun to scale back their initial expectations. They are willing to sacrifice the size of the property, or even its quality, to be able to purchase a home. Since there has been a lack of affordable housing for average income buyers recently, they do not have much of a choice.