Half of Toronto Real Estate Bought by First-Time Buyers
Home ownership is something that not everyone in Toronto feels they can afford. There is a lot of political support for first-time buyers in a push to keep a stable market. However, a recent survey by Altus Group found some interesting results on first-time buyers.
Despite high prices, the majority of Toronto real estate buyers were young, inexperienced in purchasing, and don’t have high incomes. The survey found that 1 in 2 homes were purchased by first-time buyers, which goes against many common narratives about GTA real estate.
A big question this raises is how did first-time buyers pay for their homes? Real estate prices are still increasing, and many are raising concerns about an affordability crisis.
Altus found that 79% of homebuyers tapped non-RRSP savings and investments for the down payment and 36% uses RRSP savings. A large chunk of first-time buyers, nearly 50%, used gifts and private loans from families to help finance their homes.
It’s interesting to see how first time buyers are financing their homes. By removing investments and RRSPs, they’re placing a lot of risk in a single asset. It seems first-time buyers are more interested in the security of home ownership than retirement, which may speak to their age. The survey found that 4 out of 5 buyers were under 50, meaning retirement is still years away.
Buyers and the Market
The survey suggests that these inexperienced first-time buyers may actually be the cause of the hot market that burns many of them. Over eagerness to own a home and lack of knowledge may lead first-time buyers to overbid, thus inflating Toronto’s real estate market.
This survey highlights many interesting takeaways about home ownership. It contradicts the common narrative that fewer people will ever own a home, and shows that many Toronto residents are willing to risk a secure future just to own one. Real estate is always a sound investment though, and if you’re looking to purchase your first home contact one of our amazing Richmond Hill real estate agents! We can begin looking for your dream home today!