CALGARY - Lower prices and very low interest rates are motivating Canadians to purchase their first homes - but confidence in the economy and their employment prospects are still weighing on their minds, says a report released today by Royal LePage Real Estate Services.

The real estate firm said 86 per cent of potential first-time buyers say low interest rates make them more likely to purchase a home and 81 per cent say lower housing prices are a factor. However, 76 per cent also cite job security and 64 per cent say a stable economy are also factors in their decisions to buy.

“Alberta’s urban centres continue to be popular with first-time buyers, who make up nearly a third of home sales in both Calgary and Edmonton,” said the report.

“Condominiums and detached bungalows are the most popular choices for first-time buyers in Edmonton, where lower housing prices and low interest rates are the biggest incentives for buyers entering the market for the first time . . . In Calgary, new buyers are most interested in inner city condominiums and detached houses in the suburbs, with many seeking new or renovated homes.”

In the Royal LePage survey, potential buyers were asked to rank their top incentives for purcashing their first property. While home prices and interest rates took the number one and two spots, respectively, the third most popular incentive was the First-Time Home Buyers’ Tax Credit, which was cited by 42 per cent of potential first-time buyers as either ‘very likely’ or ‘somewhat likely’ to impact their purchasing decision.

“When first time buyers stepped out of the market in the fourth quarter of 2008, at the height of the global recession, their absence was profoundly felt,” said Phil Soper, president and chief executive of Royal LePage. “Without significant volumes of entry-level homes trading hands, the entire market limped through the winter months. First-time buyers are back in force this spring, and with them the beginnings of a market recovery. While these consumers appreciate government incentives such as tax credits, greater RSP deduction limits and rebates on home renovations, it is markedly improved affordability that is proving to be the powerful drawing card.”

“Our survey demonstrates how important affordability factors such as interest rates and house prices are in stimulating demand.”

The survey portion of the Royal LePage First-Time Homebuyers’ Report was conducted by Pollara from April 29 to May 8 among 474 first-time homebuyers in Canada. The online survey was conducted among a randomly-selected sample of 474 adult Canadians who are likely to purchase their first home in the next three years. A probability sample of this size with a 100% response rate would have an estimated margin of error of plus or minus 4.5 per cent, 19 times out of 20. The data was statistically weighted to ensure the sample’s regional and age/gender composition reflects the actual Canadian population according to the most recent Census data.