Toronto’s condo craze could continue for a while if the results of the recent RBC Homeownership Survey prove to be accurate.
The number of people intending to buy a new home has increased over last year, while the number of people that see homeownership as a good investment has gone through the roof (please pardon the pun).
Nationally, 10 per cent of respondents say they are likely to buy a new home in the next two years, up from seven per cent last year, while provincially, 34 per cent intend to buy in the next two years, up from 30 per cent in 2009.
What’s particularly revealing about the survey results is the attitudes towards home ownership as an investment with 91 per cent of survey respondents affirming their belief that home ownership is a good investment. This is the highest level in 12 years, and it’s consistent with the survey finding that 64 per cent of Ontarians expect house prices to rise in 2010.
Some of the other interesting findings from the survey include the reasons for planning to purchase in the next two years, which include good housing prices (32 per cent), good interest rates (20 per cent) and the HST (5 per cent).
The RBC survey probed the whole mortgage question that’s playing on peoples minds these days and found that nearly two-thirds of buyers expect rates to rise in the next year. As part of a clear hedge strategy, four out of 10 borrowers are planning to take out a fixed rate mortgage while just 17 per cent are leaning towards a variable rate mortgage with the balance looking at combination mortgages.
What was particularly encouraging about the survey findings was the more than 40 per cent of borrowers who are paying off their mortgages faster than expected and the even larger number (64 per cent) who are taking advantage of low interest rates to pay down more principal on their mortgage.
The RBC Homeownership Survey results tell me that homebuyers are not going to get caught sitting on the fence, however they are also not going to over-extend themselves. As RBC rep Doug Crowe says, “We’re seeing a high level of confidence in the Ontario real estate market with the majority of buyers continuing to believe it’s a wise choice.”
Stephen Dupuis is president and CEO of the Building Industry and Land Development Association (BILD). He can be reached at email@example.com.