Brian Buffini`s Real Estate Report

BRIAN BUFFINI’S
REAL ESTATE REPORT
CANADIAN EDITION
1ST QUARTER 2016
HOME FOR SALE
What will 2016 hold for the Canadian real estate market? While we may not be able
to predict the future, we can look at recent statistics and trends to give us an idea of
what’s in store. Twice a year, we produce Brian Buffini’s Real Estate Report, a guide
that provides important facts and information on the national real estate market to
help you educate your clients about the process of buying or selling a home. Use this
resource in your listing presentations to help you not only flex your expertise on the
real estate market, but also to help you set expectations with your clients and find
ways to serve them better.
It’s a good life!
CONTENTS
© 2015 Buffini & Company. All rights reserved.
Industry Facts
PAGE 1
Mortgage Stats
PAGE 2
Price Information
PAGE 3
Today’s Buyer
PAGE 4
First-Time Homebuyer Facts
PAGE 5
Millennials & Real Estate PAGE 6
Buyers & the Internet
PAGE 7
Today’s Real Estate Professional
PAGE 8
Why I Work by Referral
PAGE 9
Brian Buffini’s Real Estate Report
PAGE 1
INDUSTRY FACTS
The national sales-to-new listings ratio is
56.8%, signaling a “balanced” market.
The homeownership rate
in Canada is 69%.
Ontario and British Columbia account for
60% of the housing activity in Canada.
There was 5.7 months of inventory at the
national level at the end of September 2015.
Home improvements
are the most popular
use of a home equity
account.
Actual activity, not seasonally adjusted, is
0.7% above September 2014 levels.
84+16+L
49%
49+51+L
84%
of Canadians aged
25-34 believe
owning a house or condo is
a very good investment
HOUSING STARTS ARE EXPECTED TO
MODERATE THROUGHOUT 2016 AND 2017.
PROJECTED HOUSING STARTS
Year
Range of Starts
2016
153,000 – 203,000
2017
149,000 – 199,000
PROJECTED HOUSING RESALES
of Canadians
say now is a
good time to buy.
Nationally, 36% of Canadians believe it’s a buyers’ market,
up from 33% in 2014. 28% believe it’s a sellers’ market.
Province/Region
It’s a Buyer’s
Market
It’s a Seller’s
Market
The Market
is Balanced
British Columbia
Year
Range of Resales
30%
Alberta
33%
38%
2016
425,000 – 534,000
43%
Saskatchewan &
Manitoba
20%
37%
23%
39%
39%
38%
2017
416,000 – 536,000
SOURCES: CANADIAN REAL ESTATE ASSOCIATION, STATISTICS CANADA, CANADIAN MORTGAGE AND HOUSING CORPORATION, RBC, BMO
Ontario
26%
Quebec
36%
50%
Atlantic Provinces
14%
55%
36%
16%
29%
Brian Buffini’s Real Estate Report
PAGE 2
MORTGAGE STATS
$119,000: The average down payment of a homebuyer.
This is the equivalent of one-third of the average purchase price.
49+51+L 49%
69+31+L 69%
of buyers had a down
payment of 20% or less,
including 62% of first-time buyers.
Equity from an
existing home
was the top so
urce of money
for down paym
ents by repeat
buyers.
of Canadians say mortgages
are good debt.
B U YE R S F
IN
THEIR HO ANCED 67% OF
ME PURC
HASES
WITH MO
RT
H O M E E Q G AG E S O R A
UIT
CREDIT (H Y LINE OF
ELOC).
THIS INCLUDES
:
• 81% of first-ti
me buyers
• 67% of second
-time buyers
• 50% of those
who’ve
purchased mor
e than
two homes
$67,000: The average down payment of a first-time
homebuyer, which is the equivalent of 21% of the
average purchase price.
AN
TYPES OF CANADI
S:
GE
GA
RT
MO
THE LARGEST SOURCE OF DOWN PAYMENTS WAS PERSONAL SAVINGS.
52+48+L 52%
• L oans and gifts from parents and other family members
made up 7% of down payments.
18%
+82L
18 10+90L
of first-time buyers
used loans and gifts
from family for their down payments.
10%
of first-time buyers
withdrew money from
their RRSP for their down payments.
• Withdrawals from RRSPs made up 3% of down payments.
SOURCES: CANADIAN ASSOCIATION OF ACCREDITED MORTGAGE PROFESSIONALS
id an
uyers pa
Homeb
of their
%
of 93
e
g
ra
e
v
a
price.
aximum
target m
39+61+L
72% fixed rate
21% v ariable or
adjustable rate
es
7% combination of rat
of mortgages were
originated from
banks, 34% from
mortgage brokers
and the rest from
credit unions, life
insurance or trust
companies and
other lenders.
39%
The average am
ortization
period is 22.1
years,
but the averag
e borrower
intends to pay
their
mortgage 5 ye
ars
sooner than th
eir
amortization pe
riod.
of first-time buyers
used mortgage brokers.
Brian Buffini’s Real Estate Report
PAGE 3
PRICE INFORMATION
Manitoba, Quebec and Nova
Scotia saw annual gains in
home prices in 2015.
The national average price is
projected to increase by 2%
to $442,400 in 2016.
Home prices are up
26.18% from
5 years ago.
Prices are expected to grow the strongest in Ontario.
The national average sales price rose 6.1% on a
year-over-year basis in September.
Excluding Greater Vancouver and Greater
Toronto, it increased 2.9%.
Among buyers who purchased their home from 2013 to 2015, the
average price was $347,400.
Greater Vancouver and Greater Toronto
posted the biggest year-over-year price
increases at 13.72% and 10.46%,
respectively.
In Toronto and Vancouver, supply constraints
are driving up prices, causing the national
average resale price to increase.
Average Price by Type of Dwelling
Detached house $360,023
For first-time buyers, the average price was $308,100.
Semi-detached house $327,502
For second-time buyers, the average price was $366,400.
Condominium $336,159
For subsequent buyers, the average price was $390,200.
Townhome $351,537
$433,649: The actual national average price for homes sold in
Other $206,214
September 2015.
AVERAGE HOME PRICE, BY PROVINCE:
Northwest Territories
$402,089
Newfoundland &
Labrador
Yukon
$344,790
$274,840
New Brunswick
$159,756
British Columbia
$605,258
Prince Edward Island
$146,079
Nova Scotia
$245,777
Alberta
$381,758
SOURCES: CANADIAN REAL ESTATE ASSOCIATION, CANADIAN ASSOCIATION OF ACCREDITED MORTGAGE PROFESSIONALS
Saskatchewan
$281,982
Manitoba
$264,534
Ontario
$458,483
Quebec
$281,896
Brian Buffini’s Real Estate Report
TODAY’S BUYER
25+75+L
44%
44+56+L
42%
42+
L
+
58
57+43+L 57%
20%
25%
of Canadians plan
to purchase a home
within the next two years.
of these potential
buyers will be firsttime buyers.
of buyers
purchased a
single-detached home.
TOP 5 FACTORS THAT PROMPTED THE
DECISION TO BUY
1. To stop renting
2. Previous residence was no longer
meeting needs/wants
3. To upsize from previous residence
4. To build equity/appreciation/growth
5. Pride of ownership
of current homeowners
looking to upsize their home
expect financial help from their families.
+80L
20
is the average percentage of
the home’s cost homeowners
expect family to pay.
WHO PURCHASED A HOME?
45% were first-time buyers
21% were buying their second home
34% have bought three or more homes
TOP 3 COMPROMISES MADE BY
HOMEBUYERS
1. Proximity to work
2. Size of property (including yard)
3. Quality (e.g., finishes, décor)
Buyers visited or considered
9 homes before buying.
SOURCES: CANADIAN ASSOCIATION OF ACCREDITED MORTGAGE PROFESSIONALS, BMO, RBC
WHO’S BUYING? RESIDENTS THAT
INTEND TO PURCHASE A HOME
WITHIN THE NEXT TWO YEARS:
27% of residents in British Columbia.
27% of residents in Alberta.
27% of residents in Manitoba and Saskatchewan.
25% of residents in Ontario.
24% of residents in Quebec.
21% of residents in the Atlantic Provinces.
PAGE 4
Brian Buffini’s Real Estate Report
PAGE 5
FIRST-TIME HOMEBUYER FACTS
45+55
62%
38
+
62
45%
WHAT PROMPTED FIRST-TIME BUYERS TO
START THE PROCESS OF HOME BUYING?
of homebuyers are
first-time buyers.
• A change in personal circumstances
Most first-time buyers
are between the ages
of
and
.
25
34
• A change in financial circumstances
• A
change in perceptions about the financial
advantages of homeownership
f first-time buyers
o
purchased a home
with a spouse or
partner.
Half of first-time buyers have
household incomes below
$80,000. 31%
have incomes of
$100,000 or more.
First-time buyers comprised
the majority of condominium,
semi-detached and
townhome purchases.
42+58
SOURCES: CANADIAN ASSOCIATION OF ACCREDITED MORTGAGE PROFESSIONALS, GENWORTH CANADA, CANADIAN MORTGAGE AND HOUSING CORPORATION, BMO
42%
of first-time homebuyers
anticipate help from family to
purchase a home. They typically
expect them to pay
of the
average cost of the home.
12%
Brian Buffini’s Real Estate Report
MILLENNIALS & REAL ESTATE
38+62+L
38%
Homeownership rates for people aged 25-34 have increased across Canada over the
past two decades. In 1991, more than 50% of people aged 25-34 owned their homes.
In 2011, 62.7% of people aged 25-34 owned their homes.
of millennials would prefer
to live in an urban area.
93+7+L
93%
of millennials say owning
a home is a goal.
14%
14+86L
of millennials expecting
a tax refund planned to
use it to pay down their mortgage,
compared to 9% of Canadians overall.
Population growth in the 25–34
age group is increasing steadily,
increasing demand in urban markets.
Experts say increased competition from
millennial buyers is helping to push up
prices in some markets.
SOURCES: TD CANADA TRUST, GLOBAL NEWS, CBC, BMO
PAGE 6
Brian Buffini’s Real Estate Report
BUYERS & THE INTERNET
+85L +35L
15 65
15%
of Canadians search
for information on
apartments and housing
using their smartphones.
65%
of buyers walked
through a home
they viewed online as
a result of their Internet
home search.
56+44+L
56%
f all buyers found
o
their home through a
mobile application.
More than 82% of buyers used the
Internet to search for homes.
First-time buyers consulted the Internet as the first step in the home buying process: 33%
looked for properties first, while 23% looked for information about the home buying process.
TOP 3 SOURCES OF INFORMATION USED IN HOME SEARCH
Online website
Real estate agent
Mobile or tablet website or application
40+60+L
40%
of buyers in 1964 read
newspaper ads to find a home
In 2014, 43% of buyers looked for properties online first.
•
•
•
•
•
SOURCES: GOOGLE, NATIONAL ASSOCIATION OF REALTORS®
PAGE 7
9
15% contacted a real estate agent
1
2% looked online for information about the home buying process
7
% talked with a friend or relative about the home buying process
6% contacted a bank or mortgage lender
6% drove by homes and neighbourhoods
Brian Buffini’s Real Estate Report
TODAY’S REAL ESTATE PROFESSIONAL
65+35+L
of agents have
a website.
12%
of agents have a real
estate blog.
12+88L
65%
65+35+L
PAGE 8
65%
of agents use
social media or a
professional networking website.
Buyers and sellers are working with real estate professionals at
higher rates than seen in the past.
WHAT BUYERS WANT MOST FROM THEIR AGENTS?
1.
2.
3.
4.
5.
Find the right home to purchase
Negotiate the terms of a sale
Negotiate the right price
Determine what comparable homes are selling for
Take care of paperwork
WHAT SELLERS WANT MOST FROM THEIR AGENTS?
1.
2.
3.
4.
SOURCE: NATIONAL ASSOCIATION OF REALTORS®
Market the home to potential buyers
Sell the home within a specific timeframe
Price the home competitively
Help with fix-up suggestions to increase the home’s value
Brian Buffini’s Real Estate Report
PAGE 9
WHY I WORK BY REFERRAL
Studies show
“There is no lead more powerful than
one referred from someone you know—
someone who knows you, trusts you
and will put their name to you.”
82% of real
estate sales are the result of agent
contacts from previous clients,
referrals, friends, family.
88%
of buyers
and 84%
of sellers would use their
agent again, or refer them
to others.
—Brian Buffini
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IMPORTA
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SOURCE: NATIONAL ASSOCIATION OF REALTORS®