Will there soon be any renters left in the market?
Just under one third of current Canadian renters are planning to buy a home within the next two years, according to recent study from TMG The Mortgage Group Canada. That translates into a potential increase of 12% in overall demand for home ownership, TMG predicts.
What's been holding them back so far? Affordability and interest rates, mostly. But 54% indicated they would buy even sooner if they believed interest rates were to rise 2% or more in the next 12 months.
But that's not the whole story. “The same percentage of renters indicated the ability to repay with as much flexibility as possible was as important as obtaining the lowest possible mortgage rate," notes Lawrence Smith, Professor Emeritus in Economics at the University of Toronto.
"It means Canadians are really thinking about paying off mortgages as opposed to what we’ve seen with sub-prime mortgages in the US which was all about rate, cash-flow and just getting approved.”
With home ownership rates already hovering over 70%, are there really that many renters who are actually going to enter the market, particularly in the major urban centres?
Sounds like wishful thinking to me. After all, there's a big difference between planning on doing something and actually pulling the trigger -- just ask any smoker.
What about you? If you're renting now, are you poised to jump into the market? What's your trigger point?
By Gordon Powers, MSN Money