The report, conducted between June and July 2011, surveyed 2,800 repeat home buyers. It found that repeat home buyers contribute significantly to the Canadian real estate landscape, representing 30 per cent of all new Canadians who bought homes in the last year.
The report found that two-thirds of repeat home buyers trade up to a more valuable home than their previous one, and half purchase another residence simply because they found something they liked better. Twenty-six per cent of repeat home buyers did so for lifestyle reasons, looking to move closer to family or friends, or because they wanted a larger home. Another 22 per cent bought another home to become closer to employment, while 14 per cent were motivated by investment potential.
To purchase a second home, repeat home buyers typically took out mortgages equal to an average of 80% of their home value. This was higher than first-time home buyers, who typically borrowed about 75% of their home’s value. Additionally, repeat home buyers had higher incomes than first-time home buyers, with median incomes of $90,000 compared to $70,000.
The report also revealed that repeat home buyers are increasingly relying on credit cards for their down payments. About 19 per cent used credit cards, while 16 per cent borrowed from family or friends. Only 10 per cent made their down payment in cash. This differs from first-time home buyers, where only 4 per cent used credit cards and 11 per cent borrowed from family or friends.
Overall, the TD Bank 2011 Repeat Home Buyers Report reveals that Canadians who have already purchased a home are still contributing significantly to the real estate market. They may be trading up, taking advantage of the lifestyle opportunities available, or investing in a new home for financial gain. As repeat home buyers often have higher incomes than first-time buyers, they may be in a better position to take advantage of mortgage options and credit cards, which could be contributing to their decision to purchase again.
This article was contributed on Oct 15, 2023