- TD Canada Trust Condo Poll suggests condo affordability is key for first
time homeowners -
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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
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.
SOURCE TD Canada Trust
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