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Tips for the First-Time Home Buyer

Wed, 25 Apr by Pauline Relkey

When venturing into the world of home ownership, first-time buyers often find themselves having to make important, fast decisions in what feels like a surreal situation — after all, it might have only been a few weeks since owning a home seemed more like a far-off daydream than an immediate reality. A few common sense tips will help you navigate these unfamiliar landscapes as you move towards one of the biggest financial decisions of your life.

1. Get pre-approved
Though a pre-approval isn’t a guarantee that you’ll get a mortgage when you’re find a property, having one can give you a firm grasp on what you can afford before you start looking. A pre-approval from your bank or lender will save you time by narrowing your search to a more precise selection of homes, and this, in turn, can protect you from the all-too-common disappointment that follows setting your heart on a house you can’t afford.

2. Don’t expect your standards of living to change
It’s bound to happen: you see a house that maxes out your budget, but you imagine you can make it work by cutting out things like morning coffees, cellular data and cable TV. Remember, ‘roughing it’ for the sake of your house quickly loses its charm, and you’ll soon regret the lack of wiggle room for things like new furniture, redecorating, or unexpected repairs. Don’t regret your first home — avoid becoming ‘house poor’ by staying below the upper limit of what your bank is willing to lend you.

3. Make a list and check it as many times as it takes
Each property you consider will have its own unique combination of pros and cons, and going through them can feel a little like comparing apples to oranges. Don’t expect to stay clear-headed when the house with the poor walking score has the kitchen of your dreams; instead, stay on track by building a list of “must haves” and “nice to haves.” Though your list might evolve over time (especially if the “must haves” are rare for your price range), having a set of self-imposed guidelines can keep your search on course when you’re feeling overwhelmed by options.

4. Don’t confuse “first home” with “forever home”
Most first-time buyers start out a little starry-eyed, imagining that new home will be stylish, spacious, efficient … basically, everything they’ve been dreaming of. In reality, being able to afford a house that has everything you want is pretty rare in the first go-round, which can make you feel so discouraged you start closing yourself off to the available options. Remember, your ‘starter home’ doesn’t have to meet all the criteria of your ‘dream home,’ and the equity you’ll build for the next few years will get you closer to your goal.

With so much new information to absorb, steps to take, and decisions to make, buying a first home can feel like a rollercoaster ride. It’s important not to lose your head throughout all of it. Taking a few steps to keep your expectations rooted firmly in reality can help you glide through the process and feel confident in your final decision.

Canadian Real Estate Association meets with Federal Government

Fri, 17 Feb by Pauline Relkey

Submission to the House of Commons Standing Committee on Finance:
Canadian Real Estate Market and Homeownership
February 2017

Gary Simonsen
Chief Executive Officer

EXECUTIVE SUMMARY

Thank you, Mr. Chair. The Canadian Real Estate Association would like to thank the committee
for the opportunity to participate in the study on the Canadian Real Estate Market and Home
Ownership. CREA represents over 120,000 REALTORS® from across the country. As one of
Canada’s largest single-industry associations, we represent real estate brokers and agents, as well
as home buyers and property owners throughout the country.

Canada’s housing market is a key component of Canada’s overall economic stability and an
important generator of jobs and economic security for the middle-class. In 2016, each home sale
generated over $52,000 in spin-off spending. This translates to one job for every three home sale
transactions. In addition, resale housing transactions through the Multiple Listing Service
(MLS®) generated more than $28 billion in consumer spin-off spending and created more than
198,000 jobs in 2016.

Most Canadians see their home as a source of pride, satisfaction and accomplishment not to
mention a safe environment in which to raise their family and create happy memories. This is
why CREA has been advocating for the indexation and modernization of the Home Buyers’ Plan
(HBP), a program that allows Canadians to use their RRSP savings to purchase their first home.
We were pleased to see that the plan was included in multiple election platforms in 2015 and we
will continue to work with the government to ensure it remains a valuable program for all
Canadians.

As all real estate is local, it is important to note that the housing markets in and around Toronto
and Vancouver have different realities compared to elsewhere in Canada – the vast majority of
which are either well balanced or amply supplied. It is crucial to consider and reflect upon
different areas of the country when enacting policy that affects a wide swath of housing markets,
including places not targeted directly by the government’s recent regulatory measures.
Consumer demand in markets like Toronto and Vancouver is at an all-time high and there is a
significant shortage in housing supply. Various factors have caused an imbalance on the supply
and demand of homes which in turn drives up prices significantly. As this is a complex matter,
CREA is encouraged that the federal government created a working group comprised of federal
officials as well as provincial and municipal representatives. The three levels of government will
be able to focus on the challenges in each region and recognize the local reality for all markets.
While the provincial governments in Ontario and British Columbia have recently introduced
measures to assist first-time home buyers, the federal government has tightened national
mortgage rules, thereby lessening affordability for those seeking to enter the market. If the
federal government continues to tighten mortgage rules, will this force the provincial
governments to implement further programs to assist-first time-time homebuyers? CREA and its
REALTOR® urges all levels of government to continue to work together to reach a healthy,
competitive and stable housing market. We are prepared to share analysis of local housing
market trends and apply our knowledge and data to help the government policy makers at all
levels better understand how changes to housing market regulations may affect communities
across Canada.

Assistance for first-time homebuyers should be top-of-mind for all levels of government. Firsttime
homebuyers need support to overcome the obstacle of saving for a downpayment in order to
reach their homeownership dream. The plan’s purchasing power is steadily declining and has
become less valuable due to the increase in home prices. We recommend the plan be indexed to
inflation to preserve its purchasing power and continue to help first-time homebuyers attain
homeownership.

Easing affordability concerns is a key principle of the plan and Canadians should be able to
benefit from this program more than once. Canadians and their families who face sudden life
changes such as job relocation, the death of a spouse, a marital breakdown or the decision to
accommodate an elderly family member may need support to maintain homeownership.
Expanding the plan for Canadians to use their RRSPs as a zero-interest self-loan is a fiscally
responsible way to support families through a difficult period of change.rrsp

In the last eight years, the federal government has implemented six rounds of changes to tighten
the rules for new government-backed insured mortgages and contain risks in the housing market.
These measures have been implemented over a short period of time and their full impact has yet
to be determined. We recommend the government take a pause to fully evaluate the cumulative
impact of the changes before looking at implementing additional measures.

Thank you for your time, I would be pleased to answer any questions the Committee might have.

The data included on this website is deemed to be reliable, but is not guaranteed to be accurate by the Association of Regina REALTORS® Inc.. The trademarks REALTOR®, REALTORS® and the REALTOR® logo are controlled by The Canadian Real Estate Association (CREA) and identify real estate professionals who are members of CREA. Used under license.