Here’s some interesting data from Altus Group about buyers of new homes.
- Types of Buyers:
- About half of new homebuyers purchasing from 2009-2011 were first-time buyers with mortgages (The ratio of 1st-timers has been falling if you combine new and resale purchases. According to CMHC data, it stood at 35% in 2011.)
- One third of purchasers were repeat buyers with mortgages
- One fifth were buyers who didn’t require a mortgage
- Income:
- The average annual household income of someone purchasing a newly-built home was ~$84,000
- 1 in 3 buyers of newly-built homes bought a condo. (Their income was about 15% below those purchasing freehold homes.)
Buyer Age:
- The average age of a new homebuyer was 37. (The median age was 33.)
- Less than 1 in 10 new homebuyers was 65 years old or older
- Household Participants:
- 1/4 of new homebuyers were single
- Half of new homebuyers were 2-person households
- 1/4 of new homebuyers had 3+ persons in their household
- Size:
- The average size of a new single-detached home was 1,900 sq. ft.—up about 100 sq. ft. from a decade ago.
- For new condos, the average size is 800 sq. ft.
The above survey is based on those buying new homes from 2009-2011. Our thanks to the Altus Group for these figures, which appear in volume XXI of its “FIRM Survey.” A shout-out to the Calgary Herald’s Mario Toneguzzi as well for alerting us to this report.
Rob McLister, CMT
Visited 1 times, 1 visit(s) today
Last modified: April 28, 2014
I find it intriguing that condo buyers’ income is only 15% less than people who buy freehold homes, yet condos are 58% smaller than freehold homes.
That’s because you’re not comparing apples to apples. The cost per square foot for condos includes common elements and shared amenities.
A calculation which is so disparate, inaccurate and convoluted that we appraisers long ago abandoned the cost approach when evaluating condos.
Perhaps as a self-described StatsGuy, you can come up with a formula that makes sense. Cheers.
Anything indicating percentage of buyers that are investors, flippers, etc. in the condo market?
StatGuy — Willing to bet a lot of it comes down to a lifestyle choice. Condos tend to be close to the action — downtown or in a dense, walkable community. All the amenities are right there, so the city becomes your backyard and even your entertaining space. You don’t need a car, either. Here’s a good article from openfile about the phenomenon. http://www.openfile.ca/vancouver/vancouver/text/car-free-choice-young-urbanites-ditching-their-wheels-record-numbers
Hi Grazor,
All the data we’ve seen is anecdotal. For example:
According to a TD poll, 32% say the main reason for their condo purchase is that it is a good investment.
Here’s a story that estimates “10% and 20% of pre-construction sales are made by investors who intend to flip the units as soon as the deals close.” – http://natpo.st/MDZMIj
TD cites a CMHC estimate that investors are 20-25% of the Toronto and Vancouver condo markets. TD says most
of these purchases “end up on the rental market”:
On an individual basis, however, some projects are reported to have up to 60% investors
Cheers…
Given the historically low vacancy rates, especially in Metro Vancouver, it would be a positive if a high percentage of buyers were purchasing with the intention of renting out their new properties. A softer resale market could mean a flood of new condos in the rental pool.
Maybe rental prices will decline with all the new rentals. Maybe. Personally I doubt that there are enough investors purchasing to make a significant difference in the rental marketplace, especially in the downtown or westside markets.