Over the first quarter of the year, 31 per cent of first-time home buyers that responded to a survey by Genworth Canada say they purchased through the new home market. This was tied for second place in the country alongside the rest of Alberta, which includes all respondents in the province living outside of the Calgary area. Vancouver paced this section of the survey with 36 per cent of its respondents going the new home route.
Affordable mortgage rates have helped pave the road for first-time buyers, says Cardel Lifestyles sales and marketing manager Brad Logel. The multi-family developer has projects in Auburn Bay, Cranston, Nolan Hill, Sage Hill and Panorama Hills.
“The first time home buyer has been able to take more time and be more selective in their purchase,” says Logel. “It’s not as active as last year but there are still new condo and townhome purchasers looking to take advantage of our great offers and the extremely low interest rates. It’s one of the best times ever to purchase and with our strong locations and value we offer — things are pretty good.”
Earlier this year, the Bank of Montreal (BMO) pulled back its five-year fixed term to 2.79 per cent from 2.99 per cent. TD Bank later posted the same rate.
“It’s a long-term investment and while interest rates remain low, they know purchasing now will only benefit them in the future,” says Cody Nixon. He is the area manager for Excel Homes in the Airdrie community of HillCrest, where the builder offers townhomes and front-attached garage homes.
“For first time buyers that have their down payment saved up, previously spoken to a mortgage specialist and have pre-approvals, their timeframe to make a decision to purchase is quite short,” says Nixon. “Others that have come to see us first, take slightly longer but with all the tools and contacts that we have, we are able to lead them through this process much faster so that they don’t miss out on a great opportunity to purchase.”
While price typically steers first-time buyers in where they decide to buy, other factors come into play depending on their stage in life, Nixon says.
“For those getting out of school and starting off their careers, price was a major factor in their purchase to buy,” Nixon adds. “We have also seen a number of current renters who want to get in their first home, but have had steady work for a number of years so items like the floorplan, overall size of the home and even location of the lot or community have been important decisions for them to consider.”
First-time buyers at Cardel Lifestyles’ sales centre have their eye on an attainable price at a location that meets their needs, says Logel.
“At times like this in the market, purchasers will tend to stay away from the B or C locations, instead seeking out the best,” Logel adds. “This works well for us based on the strength of our locations and the master-planned communities they are in.”
From the first quarter of the year, condos accounted for 24 per cent of homes purchased by first-time buyers in Calgary, says the study. This is followed by 20 per cent going to townhomes, four per cent for duplexes and 49 per cent in single-family homes.
The study also showed 62 per cent of all respondents across the country had help from a spouse or partner when making their first home purchase. This was followed by 35 per cent who said they bought on their own and two per cent that got help from their parents.
Along with helping with the down payment, parents are a big part of the home buying process for rookie purchasers in other ways, says Nixon.
“We find that the parents of first time buyers see us on a second or third visit to the show home and help their children by asking questions or raising concerns that they experienced personally, in a previous build,” he adds. “However we have noticed that parents aren’t the sole source that first time buyers turn to. Social media has become instrumental in helping first-time buyers decide to purchase a new home. Referrals from friends or family, or reviews from current purchasers and homeowners hold a lot of weight in what builder they decide to build a new home with.”