Mar 21, 2022
Home-buying attitude back to pre-pandemic levels: RBC survey
Mortgage rates are starting to impact affordability: David Larock
A new survey showed Canadians’ home-buying attitudes have reverted to pre-pandemic levels.
According to the annual RBC Home Ownership Poll, almost a quarter (23 per cent) of respondents said they were likely to purchase a home in the next two years – roughly the same level compared to home-buying intentions in January 2020.
The latest results mark a seven per cent decrease since 2021, when 30 per cent of respondents said they were intending to buy a home.
Almost three-in-five respondents (59 per cent) said location is more important than buying a larger home – a sign that homebuyers’ priorities are also shifting back to pre-pandemic norms.
With pandemic restrictions easing, the poll also showed that 27 per cent of renters said they feel less pressure now to buy than during the peak of the global health crisis.
Thirty per cent of respondents claimed to be living with their parents longer in order to save enough to buy a home.
"While there is still a significant amount of activity in the market, our research indicates that the rush of Canadians looking to purchase a home over the last two years has subsided and we're now starting to see a move back to pre-pandemic levels," said Andrea Metrick, RBC’s senior director, home equity financing, acquisition and distribution, in a press release on Monday.
"Between rising costs and the competitiveness of the market, Canadians may now be taking a step back and setting aside more time to plan and save before making the jump into home ownership."
The latest data from the Canadian Real Estate Association showed affordability worsened in February as benchmark home prices jumped by a record 3.5 per cent on a monthly basis.
The poll revealed roughly half (54 per cent) of respondents said they are stressed about potentially having to buy a home farther from family and friends. Additionally, with the financial impact of the pandemic still taking its toll, many prospective buyers may be delaying their home purchase until they find themselves in a stronger economic position. The poll showed that 40 per cent of those surveyed were feeling “financially overwhelmed”.
"Buying a home is the largest purchase most Canadians will ever make, so it's natural that it comes with a certain level of stress, especially in today's market," says Metrick. "While home buyers can't control market factors, taking the time to create a plan and understand where they are financially can help them feel more in control of the home buying process."
The majority (60 per cent) remain concerned about further interest rate increase coming this year, while 47 per cent said they felt well-positioned to handle higher borrowing rates.
The findings also reveal that there has been a large increase in how much Canadians plan to budget and save for a home. On average, respondents said their budget would be $506,646, compared to $453,231 in 2021. At the same time, those who already have some savings earmarked for a home purchase claim they now have $196,286 on average set aside (up from $177,558 in 2021).