A new survey suggests nearly one-in-five homebuyers during the pandemic are multi-property owners, with the remaining number evenly split between first-time homebuyers and those upgrading or downsizing to a new home.
That’s according to the latest RATESDOTCA and BNN Bloomberg survey, which was conducted online from Jan. 7-9 among 1,547 respondents, and which sought to understand who has been buying homes during the pandemic and how they’re funding their down payments.
Nine per cent of those respondents said they purchased a home in the last 18 months. The bulk of the survey focused on those individuals, and found that 40 per cent of them said they were first-time homebuyers and that the property they were purchasing is their primary residence. Those buyers were overwhelmingly between the ages of 18-34 (65 per cent), while 11 per cent were between the ages of 35-54. Interestingly, 24 per cent were over the age of 55.
Another 39 per cent said they already owned one property and were purchasing another one. Finally, 19 per cent said they owned multiple properties, while two per cent preferred not to answer.
The survey also asked homebuyers how they funded the down payment for their purchase. Nearly one-in-five first-time homebuyers (19 per cent) said they were using gifted money from a family member.
The most popular way to fund a down payment was from personal savings, with 47 per cent of respondents doing so. Another 24 per cent said they funded the purchase from the sale of another property, while 14 per cent said they leveraged equity from an existing property.
Affordability has been a major challenge for homebuyers in Canada — especially during the pandemic. A survey from Royal LePage earlier this month found that the average price of a Canadian home increased 17.1 per cent to $779,000 in the fourth quarter of 2021 compared to the previous year.
High home prices are not the only challenges that homebuyers face. RATESDOTCA and BNN Bloomberg released a report in November that found that 29 per cent of respondents who have, or are planning to get, a mortgage were unsure about how rising interest rates would impact their loan.
That survey found that 71 per cent of those who had a mortgage or were planning to get one were opting for fixed, while 18 per cent were choosing variable. Homeowners with variable-rate mortgages will be impacted when the Bank of Canada raises rates, which is on the horizon after the central bank braced households for a hike on Wednesday.
The good news is that the recent RATESDOTCA and BNN Bloomberg survey found that many Canadians put down large down payments, which leaves them in a strong equity position. Forty-two per cent of respondents said they put 20-30 per cent down when buying their home, while 15 per cent said they put down more than 41 per cent. About one in three (35 per cent) said they put down less than 20 per cent, which in Canada is only an option for homes worth less than $1 million.
BNN Bloomberg has teamed up with RATESDOTCA to take the pulse of Canadians every month on key pocketbook issues as we strive to better understand how households are navigating COVID-19. This is the latest instalment in monthly special coverage.