Half of buyers expect to spend nearly $90,000 more
CALGARY - A new survey says 47 per cent of Calgary house hunters now expect to spend 19 per cent more on a new home - an increase of $89,389 - from when they first started looking.
The BMO Fall Home-Buying Report, released Friday, said most expected to spend $568,458.
The survey, conducted by Pollara, revealed the main reasons for the higher price expectations: 86 per cent say housing prices have risen since they first started looking; 81 per cent have a better understanding of current prices; and 56 per cent were able to save more for a down payment.
“Housing prices in Canada have risen 18 per cent over the past four years,” said Martin Nel, vice-president of personal banking products for BMO Bank of Montreal. “As prices rise, house hunters need to ensure their savings are keeping pace, especially first-time buyers who don’t have the leverage of a current house in the market.”
According to the Calgary Real Estate Board, month-to-date until Thursday, the average MLS sale price in the city of $481,326 has risen by 5.82 per cent from last year.
In Alberta, the survey found that 44 per cent of house hunters now expect to spend 20 per cent more on a new home, or $82,291, up to $499,760.
At the national level, 43 per cent said they expect to spend 21 per cent more on a new home - an increase of $83,556 - from when they first started looking, an increase to $483,397.
The BMO survey found that 57 per cent of house hunters in Toronto have increased their price point and Toronto buyers expect to spend the most in Canada with the highest increase among major cities at 20 per cent or $106,883 to $634,745.
The survey found that 55 per cent of potential homebuyers have had to consider additional housing options or eliminate their first choice, citing reasons of cost, availability, and concerns surrounding the condo market. For those who eventually changed their preference or started considering more options, condos and detached houses were originally the most popular type of home being considered; semi-detached and townhouses are now the leading options, said BMO.
Month-to-date in Calgary, average MLS sale prices and year-over-year increases in the different housing categories were: single-family homes, $564,299, 10.53 per cent; condo apartments, $327,873, 5.97 per cent; and condo townhouses, $348,463, 1.16 per cent.
“By shifting toward semis and townhomes and away from detached and condos, buyers appear to want their cake and eat it too - a backyard for the kids to play in, but also something that won’t break the budget, notably in Vancouver and Toronto,” said Sal Guatieri, senior economist with BMO Capital Markets.
The survey found that: 76 per cent of buyers are concerned the condo market is overdeveloped and that a condo will not hold its value compared to a detached, semi-detached, or townhouse; 61 per cent had to consider additional options after seeing what was available in their first choice; and 80 per cent would opt for a detached, semi-detached, or townhouse over a condo, if they found one in their price range.”
By Mario Toneguzzi, Calgary Herald
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