Homebuying intentions rise to highest in 8 years: Poll
Despite tighter mortgage lending rules, the number Canadians planning to buy a home has hit the highest level since 2010, according to a new RBC poll.
The annual Home Ownership Poll, released Tuesday, revealed 32 per cent of Canadians say they are likely buy a home within the next two years.
Millennials (those aged 18 to 34) report the highest home-buying intentions, with half of those surveyed expressing plans to buy a home in the next couple of years, as their worries around employment prospects and the state of the economy subside.
The majority (84 per cent) of young Canadians said they think buying a home is a “very good” or “good” investment. And nearly one in 10 respondents in this age group even said they would buy a home without seeing it in person.
However, only about 40 per cent of respondents said they are aware of the new stress test rules that took effect in January. The majority (55 per cent) admitted the measures are affecting their home-buying decision.
“Canadians continue to feel optimistic about getting into the housing market despite changes in government regulations,” Nicole Wells, vice president of home equity financing at RBC, said in a release. “They’re taking a more informed journey to home ownership by starting with affordability.”
At the same time, more Canadians said they are somewhat concerned about interest rate increases (61 per cent), a 10 per cent jump from last year’s survey. More than one third (35 per cent) said they are contemplating purchasing a home sooner because of the low-interest-rate environment.
When it comes to making a down payment, 35 per cent of Canadians said they’d be turning to family for help, with almost an equal number (36 per cent) planning to use their own savings.
“I think part of what you’re seeing now is this sort of tug-of-war,” Kash Pashootan, CEO and chief investment officer of First Avenue Investment Counsel, said in an interview with BNN. “On one side, you have the potential homebuyer feeling pretty good that prices have softened somewhat. We’re not seeing the same level of bidding wars we saw last year.”
“The other side of the equation is of course what we’ve seen with tighter rules around what banks will lend,” he added. “It will be interesting to see where the dust settles.”