- 36% of non-homeowners under 40 have given up on the dream of
owning a home
- 62% of Canadians say most people will be priced out of the
housing market in the next decade
- 60% of Canadians likely to buy in the next two years are
saving $789/month on average
TORONTO, April 12, 2021 /CNW/ - Planning to move on
or move in? Canadians are split between giving up on ever buying a
home or putting away money to save for one. According to the RBC
Spring Housing Poll, nearly two-in-five non-homeowners under 40
(36%) say they will never own a home and 62% of all Canadians
surveyed believe the majority of people will be priced out of the
market in the next decade. For others, the pandemic has provided an
opportunity to increase their overall savings, with 44% of all
respondents saying they have saved more over the last year. For
those likely to buy a home in the next two years, the poll also
found that 60% are saving monthly, putting away $789 on average each month for a home.
"The road to home ownership isn't always easy and the last year
has created both challenges and opportunities for home buyers,"
said Amit Sahasrabudhe,
Vice-President, Home Equity Financing, Products and Acquisitions,
RBC. "Potential homebuyers need to look at their personal financial
situation as well as the current economic environment as both can
have a big impact on the ability to purchase a home."
When it comes to purchase intention, despite 54% of Canadians
polled saying it is a sellers' market (up from 41% last year,
highest since 2009), there is a large increase in Canadians who are
considering buying a home in the next two years (30%, up 8% from
2020). This rises to 49% for those respondents under 40 years of
age and 66% for new Canadians who have been in the country less
than five years.
Many factors are on the minds of Canadians when thinking about
whether to buy now or buy later. According to the poll results,
interest rates and concerns that homes will become less affordable
are key reasons why many Canadians are considering buying sooner.
In fact, 41% of Canadians surveyed are thinking about buying a home
sooner because of low interest rates and 61% believe home values
will only go up in the immediate future. Four-in-five Canadians
also continue to see housing as a good investment (83%) and the
majority say it is better to buy than rent (56%). The key drivers
among those waiting to buy a home include uncertainty about the
economy (56%, up from 40%), a belief that prices may come down
(41%), affordability issues (35%) and job anxiety (30%).
"Historically low mortgage rates and continued economic
uncertainty have created a lot of unknowns for home buyers," says
Sahasrabudhe. "As we continue into year two of the pandemic,
knowing how much flexibility you have in your finances has never
been more important. In addition to evaluating what you can afford
now, potential home buyers should put their finances through a
stress test to see if they can continue to carry the cost of owning
a home if interest rates increase or if they had an unexpected
expense or income loss."
Saving and Budgeting for a Home
While 60% of Canadians
surveyed say they would not put themselves in a situation where
they become "house poor"*, it might be easier said than done,
especially in Canada's priciest
markets. Forty-eight per cent of survey respondents planning to
purchase a home in the next two years say their budget is less than
$500,000. Meanwhile, according to
CREA, the average house price in Canada was $678,091 as of February
2021. (This rises to $864,159
and $887,695 in Ontario and British
Columbia and decreases to $290,789 and $224,785 in Saskatchewan and New
Brunswick respectively.) For those who currently own a home,
15% of respondents consider themselves to be house poor now.
When considering a down payment, almost nine-in-10 respondents
who are likely to buy in the next two years have some money saved
for a home purchase (86%), with $42,000 in savings on average. Forty per cent
have less than $25,000 earmarked for
their home purchase.
"Building up a down payment can often be the biggest barrier to
buying a home, especially as prices continue to climb in the
pandemic environment," says Sahasrabudhe. "While everyone's
financial situation is different, many Canadians have been taking
advantage of reduced spending over the year to build up their
savings and get closer to making their dream of owning a home a
reality."
Sahasrabudhe adds that no matter when or where you are planning
to buy, having access to the right information, resources and
support can help you make the best choices for your financial
situation and housing needs.
RBC has a number of digital tools and resources available to
help Canadians through every stage of the home buying process:
- RBC Mortgage Specialists are available to help support
Canadians in their home buying journey when and where they need it,
whether in branch, by phone or virtually.
- RBC True House Affordability tool provides a personalized
estimate on how much potential home buyers may be able to
afford.
- RBC Homebuyer Advantage provides step-by-step guides, tools,
calculators and special offers to help Canadians through every step
of the home buying experience.
- RBC Neighbourhood Explorer can help you quickly narrow down
your search to find the best areas to live that are most suited to
your lifestyle.
- For home buyers and sellers in select major Canadian markets,
OJO.ca (in collaboration with OJO Labs) allows home buyers to
simplify their home-search process, enjoy personalized property
insights, work directly with a dedicated concierge and be connected
with local agents and RBC mortgage professionals.
National and Regional Data Tables
Question
|
Total
|
B.C.
|
Alberta
|
SK/MB
|
Ontario
|
Quebec
|
Atlantic
Canada
|
Non-homeowners
under 40: I have given up on the dream of home ownership.
(Strongly/Somewhat Agree)
|
36%
|
41% (Western
Canada)
|
39%
|
27%
|
N/A
|
I believe that the
majority of Canadians will be priced out of the housing market in
the next decade. (Strongly/Somewhat Agree)
|
62%
|
71%
|
65%
|
53%
|
71%
|
43%
|
63%
|
Likely to buy a
home in the next two years: Are you putting aside money
monthly to save for a new home purchase?
|
60%
|
60% (Western
Canada)
|
54%
|
70%
|
N/A
|
Likely to buy a
home in the next two years: On average, how much money do
you put aside every month to save for a new home
purchase?
|
$789
|
$500 (Western
Canada)
|
$1,000
|
$800
|
N/A
|
I have been able to
save more money during the pandemic than I was able to beforehand.
(Strongly/Somewhat Agree)
|
44%
|
45%
|
40%
|
43%
|
44%
|
48%
|
40%
|
I believe that we are
currently in a sellers' market
|
54%
|
62%
|
13%
|
35%
|
64%
|
59%
|
50%
|
How likely are you to
purchase a home, or another home, within the next two years?
(Very/Somewhat Likely)
|
30%
|
24%
|
33%
|
26%
|
28%
|
36%
|
27%
|
I am thinking about
buying a home sooner because of lower interest rates (Strongly
Agree/Somewhat Agree)
|
41%
|
39%
|
46%
|
36%
|
35%
|
52%
|
32%
|
I believe that home
values will only go up in the immediate future (Strongly
Agree/Somewhat Agree)
|
61%
|
72%
|
48%
|
58%
|
70%
|
51%
|
53%
|
I feel that housing
is a very good/good investment.
|
83%
|
83%
|
81%
|
86%
|
83%
|
84%
|
82%
|
I think it makes more
sense to buy than to rent right now (Strongly Agree/Somewhat
Agree)
|
56%
|
56%
|
57%
|
59%
|
53%
|
57%
|
55%
|
It makes more sense
to wait until next year to buy a house/condo instead of buying one
now due to economic insecurity.
|
56%
|
56%
|
59%
|
N/A
|
63%
|
47%
|
N/A
|
It makes more sense
to wait until next year to buy a house/condo instead of buying one
now due to housing prices coming down
|
41%
|
45%
|
31%
|
N/A
|
42%
|
44%
|
N/A
|
It makes more sense
to wait until next year to buy a house/condo instead of buying one
now due to affordability issues
|
35%
|
43%
|
27%
|
N/A
|
44%
|
19%
|
N/A
|
It makes more sense
to wait until next year to buy a house/condo instead of buying one
now due to job anxiety
|
30%
|
27%
|
35%
|
N/A
|
35%
|
23%
|
N/A
|
I would not put
myself in the position of being house poor
|
60%
|
58%
|
59%
|
62%
|
58%
|
66%
|
61%
|
Among homeowners: I
consider myself to be house poor now
|
15%
|
11%
|
17%
|
16%
|
16%
|
14%
|
16%
|
Likely to buy a
home in the next two years: If I were to purchase a new
home, my budget would realistically be <$500,000.
|
48%
|
48% (Western
Canada)
|
32%
|
67%
|
N/A
|
Likely to buy a
home in the next two years: Have some money saved for a
down payment
|
86%
|
84% (Western
Canada)
|
85%
|
90%
|
N/A
|
Likely to buy a
home in the next two years: Avg. amount of money saved for
down payment
|
$42,000
|
$30,000 (Western
Canada)
|
$50,000
|
$40,000
|
N/A
|
Likely to buy a home
in the next two years: I have less than $25,000 earmarked
for a home purchase
|
40%
|
45% (Western
Canada)
|
36%
|
35%
|
N/A
|
|
*"House poor" is a
term that describes a person who over-extends themselves and spends
an unusually large proportion of their total income (roughly 30-40%
or more) on home ownership, including mortgage payments, property
taxes, maintenance and utilities.
|
About The Survey
These are some of the findings of an
Ipsos poll conducted between January 21 and
28, 2021 on behalf of RBC. For this survey, a sample of
2,000 Canadians aged 18+ was interviewed online. Quotas and
weighting were employed to ensure that the sample's composition
reflects that of the Canadian population according to census
parameters. The precision of Ipsos online polls is measured using a
credibility interval. In this case, the poll is accurate to within
± 2.5 percentage points, 19 times out of 20, had all Canadians aged
18+ been polled. The credibility interval will be wider among
subsets of the population. All sample surveys and polls may be
subject to other sources of error, including, but not limited to,
coverage error and measurement error.
About RBC
Royal Bank of Canada is a global financial institution with
a purpose-driven, principles-led approach to delivering leading
performance. Our success comes from the 86,000+ employees who
leverage their imaginations and insights to bring our vision,
values and strategy to life so we can help our clients thrive and
communities prosper. As Canada's
biggest bank, and one of the largest in the world based on market
capitalization, we have a diversified business model with a focus
on innovation and providing exceptional experiences to our 17
million clients in Canada, the
U.S. and 34 other countries. Learn more at rbc.com.‎
We are proud to support a broad range of community initiatives
through donations, community investments and employee volunteer
activities. See how at rbc.com/community-social-impact.
SOURCE RBC Royal Bank