Amid speculation that the federal government will take steps next year to raise the minimum down payment needed to buy a home priced above $500,000, one of Canada’s major realtors has released a poll showing that most Canadians would be fine with that. The results of a survey published in the latest RE/MAX Housing Market Outlook show that more than two-thirds of Canadians consider 10% or more to be a good down payment; 18% think less than 10% is good.

The lower down payment makes it easier, of course, for buyers to get into the housing market. However, the greater the down payment a purchaser has, the easier it will be to manage the monthly costs of home ownership, and the greater the equity the owner will have in the home. At present, the minimum down payment required in Canada is 5%. If the 5% option is removed, RE/MAX echoes the view that the effects will be minimal on home buyers in most areas of the country. In Toronto and Vancouver, where entry-level homes often cost more than $500,000, the effect could be more “discouraging” to potential buyers.

It’s worth remembering, however, that even in a hot market like Toronto, the range of prices and home types available is large. An interactive map of more than 140 distinct Toronto neighbourhoods created by Realosophy (see link below) shows that average home prices range from the mid $200s (Flemingdon Park) and upper $300s (Thorncliffe Park) all the way to the multi-millions.

Condominiums throughout the city also offer a wide range of prices, and it isn’t necessary to sacrifice convenience for the sake of a reasonable price. Tridel’s new Bloorvista at Islington Terrace condos (Bloor and Islington, on the subway) are priced from the mid $200s. So are homes at Avani at Metrogate in Scarborough.

The RE/MAX survey also supports the view that Canadians value home ownership. More than 90 per cent of Canadians consider owning a home to be part of their Canadian dream. The numbers vary from region to region, the highest being British Columbia (94.6%), the lowest Quebec (87.3%).

New Canadians will continue to be an important demographic Toronto, Vancouver and Montreal housing markets, where high demand and low supply continue to drive prices higher. The average home price increased by 10 per cent in Toronto through 2015. RE/MAX forecasts a 5% increase in Toronto in 2016. Average home prices across Canada will rise 2.5%.

Home Price Growth Modest in 2016, Higher in Toronto & Vancouver by Josephine Nolan | Condo.ca