Vancouver, BC – In a recent online study conducted by TNS Canada for TMG The Mortgage Group Canada, results showed just under one third of Canadian renters are planning to buy real estate within the next 2 years; equivalent to a potential increase of 12% in demand for home ownership. Further findings from the representative sample of Canadians revealed that interest rates have a significant impact on the timing of purchasing.
“The study found that 28% of current renters are planning to buy in the next two years,” stated Mark Kerzner, President of TMG The Mortgage Group Canada. “That’s a large pool of potential buyers poised to have a significant impact on real estate sales and the mortgage industry. Since over half of those buyers indicated they would buy faster if they believed interest rates were to rise, now is when they should be seeking professional mortgage advice, getting pre-approved and locking in an interest rate.”
The study also showed Canadian renters are equally as concerned with mortgage features as they are with mortgage rates. Lawrence Smith, Professor Emeritus in Economics at the University of Toronto noted: “The same percentage of renters indicated the ability to repay with as much flexibility as possible was as important as obtaining the lowest possible mortgage rate. This demonstrates the strength and quality of Canadian borrowers. It means Canadians are really thinking about paying off mortgages as opposed to what we’ve seen with sub-prime mortgages in the US which was all about rate, cash-flow and just getting approved.”
In response to the study’s finding that nine out of ten renters planning to buy real estate would use the services of a mortgage broker, Kerzner added: “Buyers recognize mortgage brokers provide a fast, efficient way to access a wide variety of mortgage options and solutions, in most cases at no additional cost. Saving time and money is important, especially to first-time purchasers.”
Summary of key findings:
· 28% of current renters are planning on buying in the next 2 years; one third of those plan to buy in the next 12 months. This is equivalent to a potential increase of 12% in homeownership demand.
· 54% indicated their timeframe would change and they would buy sooner if they believed interest rates were to rise 2% or more in the next 12 months.
· 91% of renters planning to buy real estate would likely use the services of a mortgage broker.
· When asked where they intend to seek information about mortgages, just as many renters indicated they will contact a mortgage broker (68%) as their bank (66%).
· 34% indicated the most important factor in choosing a mortgage would be the ability to repay with as much flexibility as possible; 33% indicated it was the lowest possible rate.
· 79% of renters planning on purchasing indicated they are educated in the buying process and aware of being able to use RRSP’s towards a down payment.
Source: gmonaco, Wireservice.ca
THE AZIZ GROUP