TORONTO — Real-estate experts say low mortgage rates and more affordable homes in many markets are drawing out first-time home buyers in droves, but one independent analyst says the correction in Canadian home prices hasn’t been nearly as dramatic as some believe.
Phil Soper, chief executive of Brookfield Real Estate Services (TSX:BRE.UN), which operates under the Royal LePage banner, said prices are falling and lenders are lowering their rates making the market attractive to people looking to buy their first home.
“The uptick in first-time home buyer purchases across the country is quite astonishing,” said Soper, speaking at a conference on the housing market.
“Affordability in places like Vancouver has improved for the first time in a very long time.”
BMO senior economist Sal Guatieri said the average mortgage payment has fallen by one-third or $600 a month from its peak, while average resale home prices have fallen 14 per cent from their highs.
Guatieri said he expects resale prices to fall “moderately further” this year for a cumulative decline in prices of approximately 20 per cent.
But Peter Norman, a consultant with independent real-estate adviser Altus Group, said the dramatic drops in home prices seen in places like Vancouver, Edmonton and Calgary are the exception.
“This is not a housing adjustment period in Canada,” Norman said in an interview.
“Certainly housing demand has slowed down because the economy is the pits, but housing supply has slowed down a lot as well as a result. . . . Outside of a couple of sub-markets there hasn’t been much of a downward adjustment on price.”
Still, other changes in the market are making this a good time to buy a first home — as long as the buyer can afford it, Norman said.
“There are a lot fewer of those stories of really rapidly selling houses, bidding wars, all that kind of stuff, so I think it can be a bit more of a sane market for somebody who’s trying to buy right now,” Norman said.