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Canadians Perceive the Housing Market as Balanced

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Canadians Perceive the Housing Market as Balanced
3 min. read
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Image: Volodymyr Kyrylyuk / Shutterstock

After five years, Canadians perceive the housing market to be balanced again with an almost equal share between a sellers’ market (34%) and a buyers’ market (36%).

Canada used to be a sellers’ market, but this year’s RBC Home Ownership Poll reveals a more balanced perspective.

Changes can also be seen in the make-up of home buyers. Canadians were previously inclined to buy a house with a partner or spouse (49% respondents in 2017). Since then, this trend has been gradually declining, with 28% saying they need the help of their family and 32% planning to purchase their home solo. Nicole Wells, Vice-President of RBC Home Equity Financing, stated:

“We’re seeing a fundamental contrast in who’s at the buying table. There is a surge in confident, in-control solo home buyers and, on the polar opposite end, those who are saying they can’t do it alone and need the assistance of family.”

House Poor May Be the New Reality of Home Ownership

Housing affordability has been taking its toll on Canadians and for 39%, purchasing a house and living house poor is a reality. On the other side, 51% of the respondents say they would not take this approach.

House poor refers to the citizens who have to invest 30-40% or more of their income on home ownership, including mortgage payments, property taxes, maintenance and utilities. For some of them (47%), the sacrifice is worth it, but almost all of them (92%) agree that mental stress is a likely effect of being house poor.

Wells believes that more time and effort are necessary to be prepared in the home buying journey. Responsibly purchasing a home means there’s still money left for other things in life.

Despite changes, 56% of Canadians still think it’s better to wait until next year to buy a home. The main reason for this delay is housing affordability. Of those who said they will wait to buy next year, 45% are planning to delay the purchase two years or more, but among millennials and Gen Z-ers aged 18-34, the rate for a two-year delay reached 55%.

Canadians expect a fall in prices. More than half (54%) of the respondents that expressed their intention to buy believe that house prices will drop – 68% of British Columbians and 58% of Ontarians expect such a price decline – and 47% list uncertainty about the economy as one of the primary reasons for delaying.

What Canadians Expect of The Housing Market

When it comes to Canada real estate, citizens have clear opinions. Recent regulatory changes are still impacting home buyers who are ready to withstand a potential downturn in housing prices (71%) or an increase in interest rates (63%).

Down payments are trending up, with 47% of potential home buyers saying they are willing to put more than 15% down (10 percentage points up from 2018) and less than 16% declare they will put down only 5% of the buying price.

When it comes to first-time home buyers, 74% (compared to 59% of all Canadians) list a prospective increase in interest rates as the first concern when thinking about purchasing a house. As a consequence, more than half of them (56%) plan to buy sooner.

A large percentage (66%) of Canadians think it is better to buy than to rent, while 81% believe that buying a home or a condo is still a good investment. Purchasing a home in the right neighbourhood seems to be less of a concern (6%), while a safe neighbourhood (20%) and affordability (21%) are top of the list of preferences. On the same note, being close to a major highway (16%), dining and entertainment (13%), good schools (11%) and public transit (10%) are conveniences that Canadians are willing to sacrifice.

As buying a house is one of the biggest decisions of a lifetime, Nicole Wells recommends getting in-person expert advice that will make sure the transaction fits both short- and long-term financial goals. Help with making the right decisions will promote overall knowledge and confidence in the buying process.

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