New buyers in Alberta are less stressed than the rest of the country

Although the supply of single-family homes has tightened over the past year, many first-time home buyers in Edmonton can still afford to buy in this segment.

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First-time buyers in the province are among the least anxious in the country, according to a new survey.

A survey by Sagen, Canada’s largest private mortgage insurer, and Royal LePage found that a majority of first-time home buyers (62%) across Canada worried they didn’t have enough for a down payment. funds and in turn would not be able to purchase the property they were looking for.

This is a five percentage point increase from the same 2019 study. Albertans, however, fared better nationally with the lowest number of first-time buyers (46 %) feeling stressed about buying a house. Two years ago, 57 percent of respondents in Alberta said they were concerned about affordability.

These days, Edmonton is particularly affordable for newbies despite the market now favoring sellers, according to realtors.

“Edmonton is still very affordable compared to other cities,” says Deidre Harrison, real estate agent at Liv Real Estate.


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The average price of a home in Edmonton was around $ 390,000 in April. In comparison, the average price of a home in the Greater Toronto Area (GTA) was almost $ 790,000. Condominiums in Edmonton remain the most accessible for beginners at under $ 230,000, according to the Realtors Association of Edmonton show.

In contrast, figures from the Canadian Real Estate Association show that the average price of a condo in the GTA was around $ 691,000.

“The concern of Edmonton buyers is more like ‘Can I get the house I want?’ versus “Can I even do it?” ”Said Tom Shearer, broker / owner of Royal LePage Noralta Real Estate.

While the supply of single-family homes has tightened over the past year, many first-time buyers can still afford to buy in this segment.

“For the average sale price of around $ 420,000, you probably find a 1,200 to 1,500 square foot two story with a double garage that is in fairly good condition,” says Shearer.

Prices have increased recently for single-family homes, as well as townhouses – often the second choice for first-time buyers.

Even condo prices “have jumped up from last year,” he adds.

The change to the mortgage stress test is adding to the stress for first-time buyers. Now all buyers must qualify as of June 1 at a borrowing rate of 5.25 percent instead of the old benchmark of 4.79 percent.

Harrison says she saw a rush of new home buyers bidding on homes in the weeks leading up to the switch. “It’s typical any time a change like this happens.”


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Still, she expects this large market segment to be able to absorb the higher qualification threshold. Harrison points to a recent discussion with a mortgage broker who noted that stress test interest rates had already been similarly high, including in January of last year when they were 5.19%. In fact, the stress test rate has reached 5.34 percent, she says.

Nonetheless, some first-time buyers, who previously sought a home close to their maximum pre-approved mortgage amount, may need to save more for a down payment or look to buy at a lower price.

“This adjustment, from my perspective, is not as huge as when they implemented the stress test,” she says of the introduction of the qualifying criteria in 2016.

“It put a big stop to the search for housing and we saw a drop in values… (so) this change is nothing in comparison.”


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