Not a day goes by without a new piece of news popping up about the real estate market in Canada. As we’ve been watching home prices hitting record after record in most metropolises across Canada, most of us have probably been asking ourselves where all this is going and how the changes are impacting home buyers and real estate professionals alike. Have Canadians gotten accustomed to the idea that they need to dig deeper into their pockets in order to buy a home — and what kind of homes are they now looking for?
To find the answer to these questions, we analyzed 3-months’ worth of home buying search behaviour on Point2 Homes Canada. This translates into a whopping 6,000,000 browsing sessions, which we believe are more than enough to build a profile of the Canadian home buyer.
Here are our key findings, at a glance, but make sure to check out below the load of insightful data we gathered:
- Nationwide, online home browsing is predominantly done by women (60% of home buyers searching on Point2 Homes are women, while only 40% are men);
- Among age groups, Millennials are the lead segment in most cities, followed by Generation X; there are some exceptions, though, as pointed out in the article;
- The most popular home price segment is between $300,000 and $400,000, which is below the national home price average of around $500,000 (July 2016; August 2016 average dropped to $450,000);
- There seems to be a striking discrepancy between market reality and search preferences in certain cities across Canada. The biggest surprise came from none other than Toronto, where home buyers on Point2 Homes were looking for homes priced up to $400,000 when the average price there is slightly over $700,000. In Vancouver we also found a discrepancy between the most popular search — homes up to $750,000 — and the average price ($1,055,000 in July and $810,000 in August, according to CREA).
- When it comes to space, there’s a very strong preference for large homes (3 and 4+ bedrooms); less than a quarter of home seekers were looking for homes with less than 3 bedrooms;
- Regional differences are quite common: for example, in Alberta 4 out of 10 people are interested in 4+ bedroom homes. At the other end of the spectrum stands Nova Scotia, where only 2 in 10 people are searching in this segment;
25% of Canadians — Most of Them Millennials — hope to find homes priced below the national average
On Point2 Homes, we generally receive over 2 million visits per month, more than 60% being female visitors in the age groups 25-34 and 34-44. As pointed out by the National Association of Realtors, Millennials represent one-third of home buyers nationwide, and women make up the majority of them. This may just be redefining home-ownership entirely, agents believe. Are their expectations realistic when it comes to finding a home?
Although from province to province home buyers’ searches by price differ, one thing is obvious: the biggest percentage of home seekers (25%) are interested in homes which cost between $300,000 and $400,000, which is below the national average of just over $450,000. If you think, okay, then people are ready to downsize … well, think again. Nationwide, almost half of the searches (46%) targeted homes which have at least 3 bedrooms, while 31% are looking for even larger properties (4+ bedrooms).
Take a look at the map below which shows which are the most popular home searches by price:
Major discrepancies between market reality and home searches in Toronto and Vancouver
Everyone knows that home prices in Toronto and Vancouver have exploded in the past years, making single-family homes almost a luxury buy. But are searches reflecting this situation? Not really, it seems.
Surprisingly enough, Torontonians’ most popular searches targeted homes which cost only slightly more than half the average price, in other words, homes of up to $400,000. One reason might be that the majority of home searches (18%) came from younger potential buyers, who are mostly women aged 25-34. Are these people looking for a starter home? Maybe. But it seems it’s not just any starter home, but one which has at least 3 bedrooms. If you’re one of these people, why not take a look at a few homes and condos in this price range? The list is not long, as you might expect, but you may just find something that’s worth your TLC.
Then comes Vancouver, another major surprise for us because of the discrepancy between the actual home prices and home buyers’ major interest in getting a more affordable home. The majority of searches (22%) came, as in the case of Toronto, from people in the 25-34 and 35-44 age groups, who were mostly looking for homes priced as low as $750,0000, while the average price has been over $1 million until July (in August, the home price dropped to $810,000). And guess what, among the searchers, 42% were hoping to find a 3-bedroom home around this price. Can they find something conforming to these criteria? Looking into our database, we found no home to match these requirements. Click here and check this out for yourself! However, there’s still a good proportion of Vancouverites (3 in 10) who are interested in something smaller, like a 2-bedroom home; expressed in percentages, this is 116% more than in Edmonton.
Hamilton, ON is another city where people — the majority of searches coming from younger buyers ages 25-34, and more mature ones ages 45-54 — are hoping to find homes as cheap as $300,000 although the average is close to $500,000. And half of the searchers are looking for large, 3-bedroom homes, which is not something impossible, if you look at the list.
The same goes for Calgary, AB, where 32% of home seekers — the majority of whom are young people between 25 and 34 years old — were assiduously searching for homes priced at $400,000, well below the average of $477,000.
Note: The table reflects data gathered in June/July 2016. For August 2016 data, please click here.
In other major cities in Canada — Montreal, QC, Edmonton, AB, Winnipeg, MB — people were generally looking for homes around the average price which have at least 3 bedrooms. In each of these cities, millennials (aged 25-34) are still the decisive group of searchers, followed by home buyers between 34 and 44 years of age. In Edmonton, 67% more people were looking for 4-bedroom homes compared to Vancouver dwellers.
In Mississauga and Saskatoon, millennials are ready to spend more on homes
Mississauga and Saskatoon are as surprising as Toronto and Vancouver, but from another point of view, as, judging from the searches, people might be ready to spend close to $100,000 more than the average price on a home. Especially in Mississauga, where we see the same group of young home searchers (25-34), the most popular home searches were similar to what we saw in Vancouver, 3-bedroom homes and a price tag of $750,000, but here they are compared to an average of $654,000.
In Saskatoon, millennials seem to be more ready to spend more money as many of them showed interest in homes above the average: $400,000 vs $339,000. Among those who searched for homes on Point2 Homes, 36% more were targeting 4-bedroom homes than in neighbouring Manitoba.
The least interested in small homes are Albertans!
If Canadians are not very interested in pricey homes, are they willing to compromise space at least? The answer is no, they are not.
Most Canadians who searched on Point2 Homes are looking for homes which have at least 3 bedrooms — many are searching for 4 bedrooms — and this is true for all provinces. The preference for bigger homes is more evident in Alberta and Saskatchewan, where more than 80% of searchers were interested in homes with 3, 4 or more bedrooms. Less than a quarter of potential home buyers were interested in 2-bedroom homes, Quebec, Nova Scotia, and British Columbia being the provinces where interest for smaller homes was highest.
How does this compare across the country? Let’s take the most significant differences: 40% more home seekers in Alberta are looking for 4-bedroom homes than in Quebec. Compared to Nova Scotians and Manitobans, the differences are even more striking — 54% and 51% respectively.
According to our data, the Quebecois seem to be the most willing to settle for something small. 64% more home buyers in Quebec were searching for 2-bedroom homes compared to home buyers in Alberta; compared to Saskatchewan, the difference is even bigger — 78% more people are looking for 2-bedroom homes.
Agents may have a hard time selling studios or 1-bedroom apartments
Studios and 1-bedroom apartments present a minimal interest for home buyers, as the percentage of searches for this type of property is in the single-digit range. Nationwide, only 2% of home buyers are looking for a 1-bedroom home, while in Nova Scotia and Quebec the percentage is slightly higher: 4% and 7% respectively. So if you’re an agent and have a studio to sell, you may have to wait longer to find an owner for it.
The most popular home price searches by province
Ontario: While the majority of Ontario folks are searching for homes between $300,000 and $400,000, in Oakville, the majority of home seekers, who are 45+, are looking for luxury homes. Nationwide, only 7% of home buyers are looking for homes priced at $1 million and up.
British Columbia: With home prices skyrocketing in several cities in British Columbia, it’s no wonder that home searches there are targeting properties of $750,000 and up.
Alberta: For most Albertans, $400,000 homes are the norm in searches. Red Deer dwellers are an exception, as most home seekers — aged 55+ — were searching for homes around $500,000, probably a retreat from the hustle and bustle of Edmonton and Calgary.
Saskatchewan: People in Saskatoon and Regina are also keeping their searches in the $300,000 and $400,000 range; however, Prince Albert dwellers are not ready to spend even that much on their next home, at least according to their searches, which are targeting homes up to $200,000.