Young Canadians see condos as stepping stone to homeownership
- TD Canada Trust Condo Poll suggests condo affordability is key for first time homeowners -
TO VIEW AN HTML SOCIAL MEDIA VERSION OF THIS RELEASE PLEASE VISIT http://www.smrmediaroom.ca/TDCondo
MORTGAGE SPECIALIST, FARHANEH HAQUE, TWEETING THROUGHOUT THE DAY ON @TD_Canada TWITTER HANDLE
TORONTO, May 10 /CNW/ - Two-thirds of young, urban Canadians who bought or intend to buy a condo, say that if they had more money, they would prefer to buy a house. The 2011 TD Canada Trust Condo Poll, which surveyed Canadians who are thinking of buying, or recently bought a condo, found that the majority of people buying condos are first time homebuyers. Affordability of condos is a big attraction, especially for respondents under 35-years-old (62% versus 46% for other age groups). This group seems to view condos as a stepping stone into homeownership, with many planning to move in the not too distant future. But, is this a good strategy?
"Before making the decision to buy a condo and own it for only a few short years, calculate the costs that you will incur, such as condo fees, parking fees and moving expenses and work this into your budget," says Farhaneh Haque, Regional Manager, Mobile Mortgage Specialists, TD Canada Trust. "Depending on how soon you plan to move, these costs could outweigh the equity you'll build and receive from the eventual sale of your condo."
Home Sweet Home - but for how long?
Almost half (47%) of survey respondents expect to live in their condo for three years or less (16%) or four to six years (31%). The number planning for a short stay jumps even higher amongst respondents under 35. Nearly one quarter (22%) of respondents in this age group said they don't plan to spend more than three years in their condo and another 45% plan to move after four to six years.
Has the tightening of mortgage rules affected the condo market?
As the TD Canada Trust Condo Poll found younger respondents to be concerned about affordability, it is not surprising that for many (63%) the amortization change to 30 years for new mortgages had a significant impact on their decision to choose a condo over other types of homes. This finding was not true for the older generation: three-quarters of those over 50 say the changes to lending rules had no effect on their decision to consider a condo.
Somewhat alarmingly, the poll found that more than one-quarter (26%) of those who were planning to buy a condo were not aware of the recent changes to lending rules. This number was even higher (39%) among those under 35. "If you plan to buy a home, it's crucial that you understand mortgage rules and options in order to make informed decisions about the mortgage you choose and the size of your down payment, possibly saving yourself a lot of money in the long run," says Haque. "Familiarize yourself with different mortgage options, so you can weigh the pros and cons of each before making a decision. There are experts at the bank who can walk you through different mortgage options and help you find the right solution for you, including different flexible mortgage payment features, which give you the flexibility that you may need one day."
Most important features in a condo
Keeping with the theme of affordability, condo fees were overwhelmingly named as the most important feature to look for in a condo (95%). Four-in-five respondents were not willing to pay more than $400 in condo fees monthly. These figures remain consistent with findings from a similar poll conducted by TD Canada Trust in 2010. Other important features were good building security and attractive interior design features (both 92%). Those over 50 are more likely to say attractive exterior design is an important consideration (88%), whereas younger respondents were more concerned about being close to public transit (85%) and near theatres, restaurants and shopping (85%).
Condos popular with boomers but for different reasons than young Canadians
Those over 50 are attracted to condos because they fit into their plans to downsize their home. Not surprisingly, when those over 50 move into a condo, 31% don't plan to move again. Since they plan to stay put, many over 50 are making their condos as comfortable as possible, with 53% planning to spend more than $10,000 on upgrades (compared to only 15% of those under 35).
"For many pre-retirees, moving to a smaller, less expensive home is 'right-sizing' and allows them to afford a bit more luxury in their new space," says Haque. "I recommend that homeowners make a budget for any upgrades and stick to it. This is especially important for those who are selling their home and downsizing as part of their retirement strategy. You don't want to get carried away and spend all the extra money you earned with the sale of your previous home."
About the 2011 TD Canada Trust Condo Poll
From March 25 to April 11, results were collected from 806 people in Vancouver, Toronto, Calgary and Montreal, through a custom online survey by Environics Research Group. Respondents had either bought a condo in the past 24 months, intend to buy a condo in the next 24 months, or considered a condo when shopping for a home.
About TD Canada Trust
TD Canada Trust offers personal and business banking to more than 11.5 million customers. We provide a wide range of products and services from chequing and savings accounts, to credit cards, mortgages and business banking, to credit protection and travel medical insurance, as well as advice on managing everyday finances. TD Canada Trust makes banking comfortable with award-winning service and convenience through 24/7 mobile, internet, telephone and ATM banking, as well as in over 1,100 branches - most open 8 'til late and many now open Sunday. For more information, please visit: www.tdcanadatrust.com. TD Canada Trust is the Canadian retail bank of TD Bank Group, the sixth largest bank in North America.For further information:
TD Bank Group