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-2011 TD Canada Trust Repeat Home Buyers Report finds 7 in 10 repeat home buyers move earlier than they originally intended -
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TORONTO, Aug. 23, 2011 /CNW/ - Two-thirds of Canadian repeat home buyers are moving on to larger or more luxurious homes and many are moving earlier than they originally planned. The TD Canada Trust Repeat Home Buyers Report, which surveyed Canadians who recently bought or intend to buy a home that is not their first, found that seven-in-ten Canadian repeat buyers were moving earlier than they expected (42%) or had no intention of moving but now find themselves on the house-hunt again (27%). Further, the number of people intending to buy a home that is not their first in the next two years increased nearly ten percentage points over 2010 (74% versus 65% in 2010).
"Our research indicates that Canadians don't stay in one home too long," says Farhaneh Haque, Director, Mortgage Advice, TD Canada Trust. "Before making the decision to move, explore all your options and ensure that your new home will suit your changing needs and lifestyle. It might be more affordable to renovate and make your current home work for you."
The top five features that Canadians felt they compromised on when they purchased their previous home that they are not willing to budge on this time are price (34%), layout of home (33%), features of home (31%), garage or sheltered parking (30%) and number of bedrooms (28%).
"If you are dissatisfied with something like the layout or features of your home, a renovation can be a convenient option to save the hassle and expense of moving. A Home Equity Line of Credit will allow you to use the equity you've built up in your home to finance the renovation. Further, if you do ultimately decide to sell, the renovation could increase your resale value," says Haque.
Fifty percent of repeat buyers considered a Home Equity Line of Credit (HELOC) and are just as likely to say they would like to have it simply as a cushion (46%) as for the purposes of a renovation (45%). Thirty percent would use the line of credit for investment purposes.
Timing is everything: Canadians think it's a good time to buy - and to sell
In this year's survey, Canadians were more likely to say that investment opportunities and market conditions played a factor in their decision to buy another home (both at 21% versus 15% in 2010). The large majority (82%) plan to sell their current home and of those who are selling, four in five expect to sell at or above asking price (78% versus 66% in 2010).
Among those who have purchased a second home and do not plan to sell their previous home, 42% will keep the first home as a rental property. More buyers this year than last indicated that they will stay in their current home and the new home they purchase will be a rental property (32% versus 20% in 2010). Interestingly, there was a big increase this year in the number of buyers who said that rather than selling their current home, a family member will move into it (12% versus 4% in 2010).
"Buyers should keep in mind that if they are expecting to sell above asking price, it's likely they will need to also buy at above asking price," says Haque. "A home is, obviously, a very big purchase - especially if you will not be selling your previous home to put towards the cost. A mortgage expert at your bank can walk you through your financing options and show you strategies and products that may save you money and provide flexibility over the course of your mortgage."
Canadians are savvier sellers than last year
The TD Canada Trust Repeat Home Buyers Report showed that 63% of Canadians have a mortgage on the home they are moving from and 69% will take out a mortgage on their new home.
In 2010, nearly three in ten Canadians (27%) who planned to sell their home didn't know they had options when it came to their mortgage. This year, that number decreased to only 9%. Thirty-eight percent of sellers say they will bring their mortgage with them and 14% say they will use it as a selling feature. Although they say they are aware of the options, 39% haven't considered what they will do.
"It's just as important to consider your mortgage options as a seller as when you are buying. You may be overlooking your mortgage as an important selling feature of your home or you may be able to save money by keeping your low rate and bringing your mortgage terms with you. Talk to an expert to find out what option might work for you," says Haque.
About the 2011 TD Canada Trust Repeat Home Buyers Report
Results for this study were collected through a custom online survey conducted by Environics Research Group. A total of 1,025 completed surveys were collected between June 16-28, 2011 of people who have either purchased a home that was not their first home within the past 24 months, or intend to purchase a home that is not their first home within the next 24 months.
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.
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