- 2011 TD Canada Trust Repeat Home Buyers Report finds three-quarters of repeat home buyers move earlier than they originally intended -
(VANCOUVER, Aug. 23, 2011) - Nearly six-in-ten B.C. repeat buyers are moving on to larger or more luxurious homes - and they're moving sooner than expected. In fact, 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 three-in-four British Columbians are moving earlier than planned. More than half (51%) had no intention of moving but now find themselves on the house-hunt again and 22% thought they would move again but not this soon. Not ones to settle, B.C. residents are experienced movers; they are the most likely in the country to have owned more than four homes in their lifetime (39% versus 29% nationally).
"Our research indicates that British Columbians aren't staying in one home too long," says Barry Rathburn, Manager, Residential Mortgages, TD Canada Trust. "There are costs associated with a move, so I'd recommend that people explore all of their options before making the decision to change homes. It might be more affordable to renovate and make your current home work for you."
The top features British Columbians felt they compromised on when they purchased their previous home that they are not willing to budge on this time is the number of bedrooms (34%). Other compromises that they won't make again include price (30%), features of the home (30%), layout of the home (28%) and number of bathrooms (26%).
"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 in your home to finance the renovation. Further, if you do ultimately decide to sell, the renovation could increase your resale value," says Rathburn.
British Columbians are among the least likely to have considered a Home Equity Line of Credit (HELOC) (37% versus 50% nationally). Of those who would consider this financing option, nearly half (47%) say they would use it for the purposes of a renovation, but nearly as many (44%) would like to have it simply as a cushion. Thirty-nine percent would use the line of credit to invest.
Timing is everything: Canadians think it's a good time to buy - and to sell
B.C. buyers are the most likely in the country to say investment opportunities (26% versus 21% nationally) and market conditions (28% versus 21% nationally) played a factor in their decision to buy another home. This is a significant increase over 2010 when 21% said investment opportunities affected their decision to buy and 15% said market conditions. The large majority (81%) plan to sell their current home and four-in-five expect to sell at or above asking price (70% versus 62% in 2010).
Among those who have purchased a second home and do not plan to sell their previous home, more B.C. buyers this year said they will keep the first home as a rental property (54% versus 48% in 2010). They are also more likely this year to say the new home they're buying will be a vacation home (15% versus 10%) or that that a family member will be moving into their previous home (15% versus 3%). Three in ten buyers say they will stay in their current home and the new home they buy will be a rental property.
"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 Rathburn. "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."
Decisions, decisions! B.C. sellers know they have options but they haven't thought about them
The TD Canada Trust Repeat Home Buyers Report showed that 61% of B.C.'s repeat buyers have a mortgage on the home they are moving from and 60% will take out a mortgage on their new home.
In 2010, nearly one-in-five (18%) British Columbians who planned to sell their home didn't know they had options when it came to their mortgage. This year, that number decreased to 14%. Still, although they are aware of their options, nearly half (46%) haven't considered what they will do with their mortgage. Thirty-eight percent of sellers say they will bring their mortgage with them. Only 2% say they will use it as a selling feature.
"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 Rathburn.
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, including 131 in B.C., 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.
- Fewer BCers have HELOCs than national average.
- 70% expect list or overlist sales price. (The actual overlist is probably less than 20%.)
- About 60% repeat buyers are buying larger or more luxurious homes.
- 80% of buyers sell their existing property.
- 39% have owned at least 4 homes in their lifetimes, well above the national average.
- 73% are moving before they thought they would, meaning transaction costs are occurring more frequently than anticipated and highlighting that our lives rarely work to plan.