Nearly a quarter of condos in Vancouver are empty or occupied by non-residents in some dense areas of downtown, a signal that investors play a significant role in the city’s housing market.

And the city overall has a much higher rate of empty apartments and houses than other Canadian cities, with a rate closer to places like New York and San Francisco at the height of their mortgage crisis in 2010.

Downtown, the rate is so high that it’s as though there were 35 towers at 20 storeys apiece – empty.

That’s the latest discovery that adjunct UBC planning professor Andrew Yan made when he analyzed 2011 census numbers to try to add more information to the contentious debate over whether Vancouver is turning into a high-end resort or offshore investors’ holding tank.

He revealed those numbers Wednesday night, as a capacity crowd turned out to listen to speakers on a panel at SFU Woodward’s talk about “foreign investment in Vancouver real estate.”

In all, the city of Vancouver appears to have about 7,500 more vacant housing units than what would be expected in most other Canadian cities. For Metro Vancouver, there are around 15,000 to 20,000 more.

That sign of high vacancies and non-resident-owned units, which contradict some other studies and assurances that Vancouver is not being flooded with investors, should give the city pause, analysts say.

“What kind of community are you living in if there are that many empty? For a city to have that kind of vacancy, it’s like cancer,” said Richard Wozny, a real estate consultant, during an interview Wednesday. “It distorts density and it’s delaying the impact. It raises the question ‘Are we over-building?’”

Mr. Yan, who specified that it’s not possible to know exactly why so many apartments were empty, said data indicates Vancouver is creating neighbourhoods that appear to be very dense, but actually don’t have an active full-time population.

That gives a skewed picture of, for example, the amount of commercial activity they can support.

In Coal Harbour, where up to one in four condos is empty in the tower-dominated waterfront neighbourhood between Stanley Park and the downtown convention centre, the scattered shops in the area often struggle to stay in business. By contrast, the West End, which has a low rate of empty residential units, is bounded by three streets – Davie, Denman, and Robson – that are packed with busy small shops and restaurants.

Mr. Yan said that the high numbers of empty apartments don’t prove there’s a problem with foreign investors, but they do indicate that Vancouver has a large proportion of general investor buyers, be they offshore or Canadian.

Housing analyst Tsur Somerville, director of UBC’s Centre for Urban Economics and Real Estate, said the data he has seen also indicates that Vancouver built more housing in the 2006-2011 period than the number of new households that were added to the city’s ranks.

That means investors. There’s nothing wrong with that, as long as those units are occupied, said Mr. Somerville, also on the panel.

“The problem is vacant units since that’s demand for real estate without housing people.”

Mr. Yan’s analysis entailed isolating the census data on dwellings that showed up as either “unoccupied” or occupied “by a foreign resident and/or by temporarily present persons” on Census Day 2011, which was May 10.

“These units could be non-resident occupied because their occupants were just away for the Census Day, between rental tenants, or moving in a just-opened building, but there is also a chance that they are someone’s pied-à-terre, vacation home or empty investment holding,” observed Mr. Yan.

In the city of Vancouver, the rate of those kinds of dwellings stood at 7.7 per cent overall, with some parts of the downtown as high as 23 per cent. In the city of Toronto, the rate was 5.4 per cent; in Calgary, 5 per cent.

If Vancouver’s “non-resident” category had the same rate as Calgary’s, it would have had only about 16,500 empty units on Census Day – the level to be expected in a regular city, where some part of the housing stock is always going to be empty for one reason or another. Instead, more than 22,000 units showed up in that category. An analysis for the whole Lower Mainland shows that it has between 15,000 and 20,000 more empty units, proportionally, than the Calgary or Toronto metropolitan regions.

Source: Frances Bula, Globe and Mail

A slowdown in Canada’s housing market will continue through 2013 and years of stagnation may follow, but no crash is likely because demographic trends will support demand in the medium term, a report by Scotiabank said on Monday.

The report by Canada’s third-largest bank said that home sales have already dropped more than 10% from spring 2012, with prices leveling off but not yet falling except in particularly hard-hit markets.

Housing, which slowed but did not crash as a result of the global financial crisis, helped sustain Canada’s economy through much of 2010 to 2012 but is now starting to slide just as the U.S. housing sector has begun a clear recovery.

Scotiabank said the housing slowdown will trim a quarter of a percentage point from Canada’s economic growth in 2013 and 2014, while the U.S. housing recovery is adding half a percentage point to annual growth rates there.

While Canadian home sales may continue to slump, the report said, prices will likely remain above year-ago levels until at least the second half of 2013, and will not drop as dramatically as they did in the United States.

Scotiabank senior economist Adrienne Warren said she expects a decline in prices of around 5% but that the drop will likely play out over the next couple of years rather than happen quickly.

She also said demographics, including steady immigration and the preference of baby boomers to remain in their homes, will support housing demand.

“Contrary to some dire predictions, population aging will not fuel a demographically induced sell-off in Canadian real estate. However, an aging population does point to a lower level of housing turnover, sales and listings,” Warren said in the report, the bank’s annual real estate outlook.

The report said today’s seniors are healthier, wealthier and living longer than previous generations, and attached to their homes, making them less likely to sell in a down market since many will not need to tap into their principal residence to finance retirement.

Warren said immigration, which adds some 250,000-300,000 people to Canada’s population every year, will increasingly be the dominant source of new household formation. And while immigrants typically rent on arrival in Canada, they seek home ownership after about five years and their rates of homeownership approach the 70% rate of native-born Canadians after 10 years.

Immigration is most likely to support house prices in big cities, Warren said. That should help put a floor under the market in Toronto and Vancouver, which had the hottest markets prior to the slowdown.

“Relative to their Canadian-born counterparts, immigrant households are more likely to reside in large and mid-sized urban centers, which could fuel relatively stronger housing demand and prices in those areas,” Warren said.

Source: Andrea Hopkins, Reuters

The bad news for China’s real estate market could be good news for Canada’s condominium market.

A crackdown on real estate ownership in the world’s most populous county might translate into Chinese citizens looking to move more of their money abroad, with Canada a leading destination.

“Absolutely it will have a positive impact [on the condo sector],” said Benjamin Tal, deputy chief economist with CIBC World Markets. “If it’s softening now, it will soften less rapidly than otherwise. This is a positive move because some of the money will find its way to Canada.”

The Shanghai Stock Exchange Property Index was off as much as 9.3% following news of the crackdown Monday, which will include increasing down payment requirements on second-home mortgages and tougher implementation of a 20% capital gains tax on property sales.

Cabada’s two largest condo markets — Vancouver and Toronto — can probably use a boost. RealNet Canada Inc. reported last month that new home high-rise sales across the Greater Toronto Area dropped to 686 in January from 744 a year earlier and 1099 in 2011. There has been less pressure on values with the group’s index showing only a 2% increases in condo prices from a year ago on a square foot basis.

In Vancouver, the real estate board for the metro area said last week that sales for existing apartment properties were down 25.5% in February from a year earlier. Prices were also down 3% in that asset class from a year ago.

Ben Myers, vice-president of Urbanation Inc., which does research on the condo sector in Toronto, said the impact of foreign investors remains unclear.

“A lot of foreign investment comes through a subsidiary so there is no way to figure it exactly out,” said Mr. Myers.

By his firm’s estimates, only about 10% to 15% of investors come from abroad and only about 5% of those people have their name on the direct purchase of sale.

“It’s a small amount,” said Mr. Myers about the number of people who might come from China to invest.

Even at a small amount, those people would be welcome in the condo sector, given sales are not quite as robust as past years.

Realtor and developer Brad Lamb says every time there is a crackdown abroad, it’s good for the Canadian market.

“Foreign buyers are trying to move their money to a safer spot for capital preservation. We see that a lot from more politically risky countries,” said Mr. Lamb. “They are looking for hard assets and the condo sector has a track record of increasing prices.”

While Mr. Myers speculated that tighter rules out of China could be bad for the Canadian real estate market if the Chinese government restricts money leaving the country, Mr. Lamb said that might mean foreign buyers are unlikely to sell here.

“There is no way in the world they are going to bring the money back,” said Mr. Lamb. “They’ve done that as a safe haven. You have money in Toronto, you leave it here.”

He said one of the methods of bringing cash into Canada via real estate is to have a student going to school here. Other times, the money is transferred to relatives.

“What makes it attractive is the scale here. We are talking $300,000 to $400,000 condos. There are few places in world you can buy that in that price range and have someone run it,” said Mr. Lamb. “It’s much harder to bring money into other countries. We have a very easy and open pipeline of Chinese money.”

Source: Garry Marr, Financial Post

Canada Mortgage and Housing Corp. has been asking realtors for months to keep consumers in the dark about whether the properties it (CMHC) sells are part of a foreclosure, according to a document obtained by The Financial Post.

The move, said to be part of CMHC national policy, upset Quebec realtors who refused to play ball, worried about an ethical breach.

The Quebec Federation of Real Estate Boards, which oversees the 12 real estate boards in the province, says it challenged CMHC about the change requiring them not to report on a detail sheet that properties for sale were part of a foreclosure, despite the fact that information is considered mandatory when loaded by brokers onto the selling system of local boards.

“Because the repossession field is currently a mandatory field in the brokerage system you have no choice but to indicate ‘no’, which goes against ethical rules stipulating that real estate brokers are obliged to publish information that is truthful and verified,” the group said in a statement to members.

The two sides resolved the issue by making it no longer mandatory to reflect the foreclosure status of a home, based on the seller’s instructions.

The issue raises a larger concern about why CMHC is acting now to tighten up its practices for foreclosures.

Some real estate industry insiders wonder whether the Crown corporation is simply being prudent, not letting potential buyers know a property is part of a distressed sell so they can put in a low-ball bid.

Others question whether the Crown corporation is just getting things in order in case home prices collapse and they are forced to sell properties that are backed by government insurance.

In Canada, anyone buying a home with less than 80% down and borrowing money from financial institution covered by the Bank Act must get mortgage default insurance. CMHC, which controls about 75% of the insurance market, is ultimately backed 100% by the federal government.

“Look at what is going on right now in financial institutions and everybody is ratcheting up their loan-loss provisions,” said Ben Rabidoux, a Canadian analyst for California-based Hanson Advisors, a market research firm whose clients are institutional investors. “Everybody expects loan losses to rise. I can’t imagine CMHC is in the dark on that. My suspicion is they want to limit any loss that hits their books.”

By limiting the information on whether a property is part of a foreclosure, the Crown corporation would potentially avoid a situation in which a buyer knows it has to sell. In the United States, foreclosed properties have sold at huge discounts.

“CMHC is trying to get the better price,” said Don Lawby, chief executive of Century 21 Canada, who had not heard of the new policy. “You know something is repossessed, you low-ball the offer. You know you are not dealing with a homeowner but an investor.”

Based on current market conditions, CMHC doesn’t appear to be looking at a huge uptick in foreclosures. The latest data from the Canadian Bankers Association shows only .32% of mortgage holders are in arrears and the number is actually on the decline.

Some also question whether the strategy would amount to much because although brokers may not load the foreclosure information onto a public site, it would become readily apparent to any buyer it was a repossession when CMHC is revealed to be the seller.

The Quebec Federation of Real Estate Boards, while leaving brokers the option about publishing the information, indicated brokers will ultimately tell people CMHC is behind the sale when asked.

“The broker has to give the information once anyone is interested in that property,” said Chantal de Repentigny, assistant director of media relations with the federation. “The only thing that has changed is they have the choice to do it on the listing.”

Source: Garry Marr, Financial Post

A new report says the cost of home ownership in most major Canadian markets was down slightly in the last three months of 2012 but notes that pressure on household budgets remains somewhat above the historical average.

“Home ownership costs came down for a second consecutive quarter as a share of household income thanks primarily to small declines in mortgage rates and home prices in several markets across the country,” the RBC report says.

But it notes that there were also back-to-back back cost increases in the first two quarters of 2012, extending a pattern of alternating decreasing and increasing affordability that has been going on since 2010.

The absence of clear direction in the trend in the past three years, in turn, means that affordability pressures continue to be somewhat greater than they have been on average historically.

“RBC’s measures still modestly exceed their averages since the mid-1980s, with the imbalance being more pronounced in the two-storey home segment.”

Vancouver showed the biggest improvement from the third quarter, but remained the least affordable home property market tracked by RBC Economics Research.

In that city, the cost of mortgage payments, utilities and property taxes for a benchmark detached bungalow would eat up 82.2% of a typical household’s pre-tax income.

That’s down 2.6 percentage points from the previous quarter but still indicates the cost of basic home expenses in Vancouver is beyond the reach of many people.

The RBC Housing Trends and Affordability report, compiled four times a year by the group that owns RBC Royal Bank, estimates it would take $147,700 of annual income to qualify for a benchmark mortgage on a Vancouver detached bungalow.

In Toronto, the second-most expensive market tracked, the qualifying income in the fourth quarter was $111,400, resulting in an affordability measure of 52.8% — down four-tenths of a point from the third quarter.

As is often the case in national real estate statistics, Vancouver and Toronto tend to have a disproportionate impact on the overall numbers.

On a national basis, the bank estimates the cost of owning a detached bungalow eased by two-tenths of a point to 42.1% of household pre-tax income. The qualifying annual income in this case is $77,200 — roughly half Vancouver’s rate.

RBC estimates it took 28% of pre-tax income to cover a condo’s basic costs and 47.8% of a typical family paycheque to pay for a two-storey home — down two-tenths of a point and three-tenths of a point respectively.

Source: Canadian Press

I get asked this a lot, especially around this time of year when RRSP deadlines are looming. If you’re a first-time homebuyer, then yes, RRSPs and pension savings can be put towards a down payment. This article written by Jim Yih, a financial expert, appeared in Postmedia News.

Twenty years ago, I borrowed $10,000 from my RRSPs, under the federal government’s Home Buyers’ Plan, to help me purchase my first home.

Since then, I have always been an advocate of the Home Buyers’ Plan.

It’s a great deal for those looking to purchase their first home because they can borrow up to $25,000 from their RRSPs.

Under the plan, you do not pay tax on the withdrawal because it’s like a loan that has to be paid back into the RRSP over a 15-year period.

Each year, you have to pay back one-fifteenth of the borrowed amount. If you don’t, then the required payment becomes taxable that year.

I recently talked to two young people who are planning to buy their first house this year. Their stories each illustrate how they are able to use their RRSPs and the Home Buyers Plan to their advantage.

But what happens when you have no RRSPS?

Mark has been working for three years, since graduating from university. He has saved $10,000 toward the purchase of his first home. His parents are going to match his savings and give him another $10,000 toward the down payment.

Because he has focused his savings on purchasing a home, he has not put any money away in RRSPs and therefore has considerable unused RRSP contribution room available to him.

Since Mark has no RRSPs, he is not able to take advantage of the Home Buyers’ Plan.

I suggested that Mark take both his $10,000 and his parents’ matching contribution and put it into to his RRSPs right away. After 90 days, he can get the money out through the Home Buyers’ Plan. This is advantageous because his $20,000 contribution creates a significant tax savings.

Let’s assume Mark is in a 32-percent marginal tax bracket. That means that a $20,000 RRSP contribution will give him a tax refund of $6,400. That $6,400 can be used toward the down payment of the home, or it can be used to deal with all the other costs like legal fees, moving costs, utility hook ups, etc. By contributing the money to the RRSPs first, Mark is creating $26,500 for his home purchase, instead of just $20,000, because of the tax deduction.

In another case, I met Stan, who is also looking to buy his first home this year. He has only saved $6,500. He has an RRSP at the bank worth about $3,500 and he has $8,000 in a defined contribution pension plan from one of his previous employers. Stan was thinking about cashing in this pension and using it toward the purchase of his home.

Normally, pension money cannot be cashed out. But because the balance of the pension is less than 20 per cent of the current Yearly Maximum Pensionable Earnings, he is able to do so. The problem with cashing out the pension is that Stan will have to pay tax on the withdrawal. Instead of getting $8,000, after paying tax he would only have $5,450. However, instead of cashing out the pension, Stan is able to transfer the pension to his RRSP. He won’t get a tax deduction, but he can use the entire $8,000 toward the down payment of the home through the Home Buyers’ Plan.

After transferring the $8,000 pension into the RRSP, he should also contribute his cash savings of $6,500 to it, as well. With the $3,500 already in his existing RRSP, he would then have $18,000 in the RRSP that can be pulled out through the Home Buyers’ Plan. In addition, his $6,500 contribution would result in a tax refund of approximately $2,000. This scenario will give Stan $20,000, compared to only $15,450 if he cashes out the pension and does not put the $6,500 into the RRSP.

Since we are in the heart of RRSP season, first-time home buyers should consider making a contribution to their RRSP, to get an immediate tax deduction and a corresponding refund in April or May of this year.

Any contributions to the RRSP can be withdrawn through the Home Buyers’ Plan 90 days after deposit. Any contributions will result in a tax deduction, which will give the homebuyer a little extra cash. Basically, first-time homebuyers with cash should contribute to their RRSPs, if they have the contribution room.

For more info, visit Jim’s blog, RetireHappyBlog.ca.

Renovating a home to make it more energy efficient can be expensive, but Canada Mortgage and Housing Corp. (CMHC) offers a program that could reduce the sticker shock.

CMHC Green Home offers a refund “equivalent to” 10% of CHMC mortgage loan premiums for those who use CMHC-insured financing to pay for a renovation that increases the energy-efficiency of a home.

Legalese aside, the program, which dates back to 2004, offers an incentive for homeowners looking to either renovate their homes to be more energy-efficient, buy a home undergoing improvements, or build or buy a new green home, says CMHC business development representative Nicole Lilge.

“Our Green Home product is great for people looking for high-ratio financing and who have plans for [an energy-efficient] home renovation or new home,” she says. “And you can go online and fill out the form.”

There are several steps to take in applying for the CMHC Green Home program.

First, and before any renovation work begins, says Lilge, you need to have your home inspected by an energy advisor qualified by the Office of Energy Efficiency (part of National Resources Canada) to determine the home’s EnerGuide (energy efficiency) rating at the outset. According to the CMHC, after taking this baseline reading of the home, the advisor will then provide suggestions for improving that rating as part of your upcoming renovation work.

For the second step, “the main thing is to talk to your lender or your broker to say we’re purchasing a home that we know is green, or we will be renovating a home,” Lilge says. At that point, the homeowner can find out what CMHC insurance-related refinancing options might be available.

After that, the saws and hammers come out and work begins on your renovation, addition, teardown and rebuild, or whatever vision you have for your home.

Once the dust settles, and within 24 months of completion, a second inspection by an energy advisor must be conducted to determine whether efficiency has actually been improved.

CMHC’s website says the threshold of improvement for a home reno has to be at least five points and a minimum overall EnerGuide rating of 40. For new homes, the EnerGuide rating minimum ranges from 77 and 82 — the number varies depending on the purchase-closing date and was recently increased to 82 for purchases closing on Jan. 1, 2013, or later. Hit the magic number, and you may be eligible for the premium refund. You can apply via an online form or download the application and mail it in.

Although the program has been in place for nine years, homeowners are often not aware that it’s available as a potential option when they finance a major renovation, says Ryan Scott, president of Avalon Master Builder.

“Quite a few of our customers have taken advantage of it — but almost none of them were aware of it prior to purchasing a home from us,” he says. “It is a perk of buying from a green builder.

“The biggest challenge is awareness of the program, and what it means to [customers] and how much money it can save them. The paperwork is pretty simple.”

Scott says that whether building new or renovating, clients often misunderstand some of the terminology used in building. “A lot of people think ‘building to code’ builds you an [energy-efficient] house,” he says. “It builds you a house that is safe — ‘code’ is all about safety, it’s not about energy-efficiency. Building a house ‘to code’ isn’t good enough.”

Although an exact breakdown of how many home renovations have taken advantage of CMHC Green Home isn’t available, Lilge says, “since 2004, Green Home has provided more than $6-million in premium refunds.”

Green Home is one of a number of CMHC resources, including information resources, available to homeowners and renovators, says Lilge. There are brochures available on a variety of topics via links on the CMHC Green Home website cmhc-schl.gc.ca/greenhome.

“[Homeowners] can also take advantage of our Purchase Plus Improvements Program, where you would include the cost of your renovation in your mortgage at the outset,” Lilge says.

The program allows those buying homes that need to undergo major renovations to roll the cost of that work into a single monthly mortgage payment rather than having to create separate financing, if the cost of the renovation work is known.

Source: Alex Frazer-Harrison, Postmedia News

Canadian housing starts plunged in January as both single and multiple starts fell, particularly in Ontario, Canada Mortgage and Housing Corp said on Friday in a report that showed the housing market was even weaker than expected.

The agency says there were 9,904 actual starts last month, compared with 13,038 in January 2012.

The seasonally adjusted annualized rate of housing starts was 160,577 units in January, down from 197,118 in December. The December figure was revised down from the 197,976 units reported previously.

The CMHC said it was preferable to focus on the six-month moving average of housing starts, which were trending at 203,208 units in January.

Canadian housing starts plunged in January as both single and multiple starts fell, particularly in Ontario, Canada Mortgage and Housing Corp said on Friday in a report that showed the housing market was even weaker than expected.

The agency says there were 9,904 actual starts last month, compared with 13,038 in January 2012.

The seasonally adjusted annualized rate of housing starts was 160,577 units in January, down from 197,118 in December. The December figure was revised down from the 197,976 units reported previously.

The CMHC said it was preferable to focus on the six-month moving average of housing starts, which were trending at 203,208 units in January.

Source: Reuters, Canadian Press

It’s something that most homeowners think about – is it better to sell your home first before buying the next, or should you buy first so that you know you have something to move into, and then sell your existing home. Here’s an article that I saw in today’s Financial Post, written by Garry Marr.

It’s the first choice you have to make when you decide to move and one that just might define the state of the housing market.

Do you start the process by selling or buying? Buy something and the clock starts ticking on selling your current home because you likely need that money to close the house you just purchased. In markets where sales are plummeting that could be a scary proposition.

So you sell first. But what do you do if you can’t find something you like in the neighbourhood you want. Remember, your kids need to go to that local school and be in the district. Are you prepared to rent for a while?

People in the industry say the tradition historically has been to sell your home and then start shopping for the new one. But in this housing market, with multiple offers the norm and time on the market dropping in many cities, the process reversed and people starting buying, knowing their home would sell with ease.

Could the tide be turning in another sign of a slowdown for housing?

There are drawbacks to both selling first or buying first but the decision is very much based on your view of the market.

One option is to demand a closing date on your purchase a little further out, increasing your odds of selling. Renting is an option, but that market can be tight too.

Real estate agent David Batori says he’s telling his clients to sell first because he believes more listings will come to market in the spring. But he points out that, for a young family, selling first comes with the risk of not finding something in the right neighborhood.

“If you are too picky, you’re in trouble,” said Mr. Batori, who adds if you can carry two properties you should buy the home that is perfect for you with that long closing date.

You are going to need a lot of capital to pull that off because bridge financing at the banks is difficult to obtain without a buyer commitment for your existing home. The banks will provide bridge financing about two percentage points above prime if the closing date for the sale of your home comes after your purchase date, but you have to have a committed buyer.

Ultimately, if you buy first you can reduce the price of the home you are selling to move it.

Forget about trying to walk away from your purchase though, you’ve made a commitment to buy and left a deposit. “You can’t just walk away, you’ll be sued, you are in breach of contract,” says Mr. Batori, adding he has only seen someone try to walk away because of a death.

You can try to buy a home with a condition that says the purchase is subject to the sale of your existing home but you are going up against people with no conditions.

“Sellers will laugh at you,” says Mr. Batori, adding before anybody agrees to that type of offer they’ll have an escape clause in case a firm bid comes in. That clause might give you a right of first refusal but you’ll have to come back with a clean offer with no conditions.

Farhaneh Haque, director of mortgage advice and real estate-secured lending at Toronto-Dominion Bank, cautions against buying without having a firm seller for your existing home.

“You can have the equity for two properties but you also need to have the income to carry both properties,” said Ms. Haque, adding the bank probably won’t extend credit to you for two homes without a high enough income. “It would put you in a situation that is uncomfortable and maybe not even affordable. Do you want to sell a property because you are desperate?”

Doug Porter, chief economist at BMO Capital Markets, said any shift in the trend to buy or sell first will depend on the city because some cities are still sellers’ markets.

“In a sellers’ market you can [buy first],” said Mr. Porter. “In most major cities, we are shifting. Personally, I would sell first.”

Ultimately, it comes down to your view of the market. You want to buy first, you have to be pretty confident you can sell. Are you?

A Re/Max survey says 70 per cent of home sales in the next 24 months will be to repeat buyers with some previous experience as owners.

The real-estate marketing organization says second-time or multi-time purchasers will be more fiscally conservative and don’t plan to over-extend themselves.

And it says slightly more than 80 per cent of potential buyers surveyed believed that housing values in their area will rise or remain the same.

Re/Max says 42 per cent of those surveyed said they expected to spend between $250,000 and $500,000.

The findings are in line with other research that found first-time buyers had been discouraged by stricter mortgage rules since last summer and affordability issues.

But the survey found first-time buyers aren’t sitting totally on the sidelines and will make up a third of the market.

The survey also says almost one in five buyers will be single.

“Purchasing patterns have evolved, with a more conservative, fiscally responsible purchaser moving to the forefront,” Gurinder Sandhu, executive vice-president and regional director of Re/Max Ontario-Atlantic Canada.

Re/Max says second-time and multi-time buyers became a more important part of the market in the latter half of 2012.

“While affordability took a hit in 2012, homeowners with considerable equity remain confident and well-positioned. They will be the driving force fuelling the bulk of home sales in the months ahead,” Sandhu said in a news release.

While some buyers intend to downsize or make lateral moves, many of those trading up have amassed considered equity, he said.

Not surprisingly, of those putting down 30 per cent or more, 45 per cent were aged 55 and over, the survey said.

Sandhu noted that first-time buyers are experiencing a period of adjustment.

The survey indicted that singles would be the most cautious buyers with 47 per cent of purchasers intending to spend under $250,000.

Of the buyers planning to spend $500,000 to $1 million, almost half resided in Ontario, while the remaining 50 per cent were almost evenly divided between British Columbia and Alberta.

“Regardless of income, gender, age, or location, most Canadian respondents shared considerable confidence in Canada’s housing market,” Sandhu said.

“This stands as perhaps the greatest indicator that home buying intentions will remain healthy and stable. Combine this with an economic engine that is expected to gain momentum, and the outlook is most certainly positive.”

The national survey, hosted on the Angus Reid Forum in December, was conducted among 1,109 prospective purchasers who intend to buy within the next 24 months.

Re/Max is a leading real estate organization with more than 19,000 sales associates throughout its 750 independently-owned and operated offices in Canada

Source: LuAnn LaSalle, The Canadian Press