The 17th Annual RBC Homeownership Study has indicated that Albertans are the most positive of all Canadians about home purchase and investment. They are also the most likely of all Canadians to buy a house in the next two years. While Alberta's optimistic attitude towards real estate is certainly encouraging for the overall economy, one might ask, “What does Alberta have that makes its residents so confident in their real estate investment plans?”
Most Albertans (92%) think that buying a home is a good investment. Of these, the Albertans who are looking to buy in the next year or two cited “good housing prices, favourable interest rates and the opportunity to buy a home as an investment or second home as the primary reasons behind their buying intentions”. However, this may not be the only reason why Alberta holds many happy homeowners.
The survey found that 65% of Albertans own their own home. Of these:
- 42% are paying their mortgage faster than expected
- 67% of Alberta homeowners are using low interest rates to pay more on their mortgage principal
- 29% have used a lump sum to reduce their mortgage principal
- 22% have doubled up on their mortgage payment to reduce mortgage
It seems that many Albertans are being smart about their real estate investments. Extra payments, lump sum deposits on the principal, buying or refinancing when low interest rates offer all contribute to a mortgage that is more manageable and thousands of dollars saved. Also, Albertans plan to invest one of the largest average down payments on their homes ($85,434), which also contributes to a smaller overall debt load.
There is also the issue of responsibility for one's mortgage. Of the people polled, 98% thought that it was the homebuyer's responsibility to make sure that they take on an affordable mortgage. However, 97% also thought that banks should help the homebuyer out with information about what happens to their mortgage if interest rates should rise.
All told, Albertans have one of the most positive outlooks on real estate in Canada. Part of it is undoubtedly Alberta's rich resources and the lucrative opportunities in its business centres. Much of it, however, can be attributed to the province's citizens' overall smart attitude towards home buying and money management. Albertans have a history of hard work and investment in their province; something that certainly has not been lost on the present generations.
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