With evidence confidence in the real estate market is increasing, there are indications first-time home buyer intentions to buy have not wavered, says Phil Soper, president and CEO of Royal LePage.
“We saw intentions through the Environics study that Genworth did in February and May and we found intentions to buy are the same,” says Soper. “They’re asked if they intend to buy in three months, six months, 12 months and two years, and intentions, and didn’t slip from February to May. It’s interesting the intent of people to purchase with less than 20 percent down has risen materially, so my theory is just like 2009, there will be over-sized interest from the first-time home buyer group.”
First-time buyers are critical to the success of housing markets.
“When you come to the market as a first-time home buyer, you don’t have a home to sell, so you’re creating further imbalance in favour of sellers, so you’re propping up prices even more, so if we do have growth in the first-time homeowner sector, that will do even more to prop up prices,” says Soper. “Our expectation is that prices will soften during the foremost stay-at-home mandates that are still in place in Ontario and Quebec and as those are released all across the country, as they have been in Manitoba, Saskatchewan and Alberta. That balance we have between buyers and sellers will hold and the risk premium that buyers are demanding during the lockdown time will start to dissipate.
“Our outlook for the year is that prices will end up essentially flat or up one percent, nationally. We see about three percent softness in Calgary and about the same in Edmonton. We see prices rising a little bit in Vancouver and Toronto.”