TORONTO,
April 4, 2022 /CNW/ -
Canadians are less likely to purchase a home now than they were at
the height of the pandemic, according to the latest Scotiabank
Housing Poll.
Twice as many Canadians are putting their plans to purchase a
home on hold in today's economic environment, when compared to the
first year of the pandemic and the height of uncertainty in 2020.
Of those Canadian surveyed in 2022, 43% said they were putting
their plans on hold, compared to 33% in 2021 and 20% in 2020.
Concerns over costs of living, rising interest rates, market
instability, and economic uncertainty has most millennials feeling
discouraged about their homeownership aspirations. 90% of Canadians
aged 18-34 believe that housing prices will continue to increase
over the next 12 months, and 62% say they are waiting for
housing prices to come down before buying a home. More than half of
millennials (56%) say the current economic environment has
negatively impacted their finances putting their homebuying plans
on ice.
Despite loosening restrictions and employees returning to
work, market conditions have motivated even more Canadians to
move further away from major cities to get more for their money
(35% in 2022 versus 29% in 2021). This is most common amongst
younger Canadians, of which half (49%) are considering moving out
of their city to get more 'house' for their money.
"It's no surprise that a perfect storm made up of the rising
cost of living, housing supply shortages, and increased demand has
caused Canadians to feel like homeownership is out of reach," said
John Webster, Head of Real Estate
and Secured Lending at Scotiabank. "It's important that Canadians
know that they're not alone. Many others are going through the same
thing, and it's why more people are looking for sound advice from a
trusted source."
With the market showing no sign of slowing down, more homeowners
are choosing to stay put and invest in their existing property.
According to the poll, 59% of Canadians are choosing to renovate
their existing property instead of purchasing a new home in 2022,
up from 56% at the peak of the pandemic in 2020.
Highlights from the 2022 Scotiabank Housing Poll:
Homeowners choosing renovations instead of new locations
- When compared to the last two years, fewer people are planning
to purchase a new home to live in (15% in 2022 versus 17% in 2021
versus 18% in 2020).
- Most homeowners (59%) are planning upgrades or renovations to
their current home within the next two years, 15% are planning to
buy a new home/sell their current home, and 10% are planning to buy
a leisure/investment property.
Interesting interest rates
- 51% of Canadians aged 18-34 feel that the threat of rising
interest rates has put their home buying plans on hold.
- Most Canadians are more concerned about the increasing price of
goods and services than they are about a potential interest rate
hike (81%).
No stopping the suburbs
- More Canadians (35%) are looking to move out of their city this
year to get more out of their money compared to the previous year
(29%).
- More Ontario residents (39%)
are considering moving or buying a home out of the city to get more
for their money, in comparison to residents of other
provinces.
Tips for planning the next step in your homebuying journey
1. Meet with a mortgage advisor who can help you fit your
homebuying aspirations and other financial goals into your broader
financial plans.
2. Do your research – ask your advisor for information on the
mortgage solutions available to you that may have benefits in
today's economy. A financing solution that can meet your changing
needs, like the Scotia Total Equity®* Plan (STEP) could help.
STEP allows you to split your mortgage into variable rate and fixed
rate components, and by adding other credit solutions like a
ScotiaLine® Personal Line of Credit, you can gain flexibility and
control in a changing interest rate environment.
3. Determine your fixed costs – if you're considering buying a
new property, identify the true costs including closing costs,
legal fees, down payments, insurance, and what a rate hike would
mean for your monthly payments. If you're looking to renovate, make
sure you calculate all the costs involved, and get an up-to-date
quote that considers the price of materials and labour in today's
market.
4. Consider the unexpected costs that may come along with
homeownership. While you may have fixed costs and expenses in your
plan, you may need additional financing down the line if you want
to finish your basement, add an addition on your home or if
unexpected renovations pop up. Look for home financing solutions
that will support your financial goals, today and in the future. A
financing solution like STEP can allow you to gain access to your
borrowing power as you pay down your mortgage without needing to
refinance.
5. Get a pre-approval by making an appointment with a mortgage
advisor or get it completely online with Scotiabank's
eHOME1. A pre-approval is important to understand what
you can afford before you begin the home buying process.
6. Get educated – visit the Scotia Advice+ Centre for more
advice and listen to the latest episode of Scotiabank's
Perspectives podcast to hear about what's happening in
Canada's housing market right now, and learn how it could impact
your homebuying journey.
®Registered trademark of The Bank of Nova Scotia.
*Subject to meeting Scotiabank's standard credit criteria,
residential mortgage standards and maximum permitted loan amounts.
Conditions apply. Some mortgage solutions may not be eligible to be
included as part of a STEP.
1 All mortgage applications are subject to meeting
Scotiabank's standard credit criteria, residential mortgage
standards and maximum permitted loan amounts. Switch
applications in Quebec cannot be
completed through eHOME. Please visit here to find
out about our other switch offers.
Methodology:
This Maru Public Opinion survey conducted on behalf of
Scotiabank was undertaken by the sample and data collection experts
at Maru/Blue who surveyed 3,027 randomly selected Canadian
adults (2,038 homeowners and 914 renters) who are Maru Voice Canada online panelists from
February 15th to February 17th 2022.
The results of this study have been weighted by education,
age, gender and region (and in Quebec, language) to match the population,
according to Census data. This is to ensure the sample is
representative of the entire adult population of Canada. For
comparison purposes, a probability sample of this size that is
comprised of full-time employed respondents used in this study has
an estimated margin of error (which measures sampling variability)
of +/- 1.8%, 19 times out of 20. Discrepancies in or between totals
when compared to the data tables are due to rounding.
SOURCE Scotiabank