According to Mortgage Professionals Canada's report 'Rapidly Evolving Expectations in the Housing Market', there has been no change in Canadian's desire to be homeowners despite the pandemic. Instead, there has been an increase in the number of Canadians who plan to buy their first home within the year and a drop in the percentage of those who expect to never buy a home. At the end of 2019, 14% never expected to own a home and that had dropped to 3%.
There are a few reasons for why an increasing number of Canadians want to become homeowners:
Low mortgage rates and low interest rates has meant that more people see buying a home as being more affordable than before the pandemic, despite the increase in prices. In 2019, only 7% of those surveyed planned to buy their first home. This number jumped to 27% according to the MPC survey conducted at the end of January 2021. Another reason for wanting to buy a home while interest rates are low is the belief that this is an opportunity that cannot be missed. Fear of missing out (FOMO) on a great mortgage deal is driving some first-time home buyers.
Demand has been strong for the last six months and is clearly not going to diminish soon. However, the available supply is low, which has resulted in rapid price growth. Not everyone who wants to buy a home will be able to do so. However, there may be some hope for those living in Toronto. If the vacant home tax is implemented, more than half of investors surveyed by IPSOS said they'd sell or rent their units. Of these 40% said that they would sell their vacant investment properties.
There was considerable pessimism when it came to confidence about the economic outlook and it is still lower than at the end of 2019. Despite this, attitudes are more positive than at the end of 2019 when considering whether now is a good time to buy a home. There is also a high degree of confidence that real estate is a sound long-term investment, though Canadians so see a home as a place to live first and as an investment second.
Though the pandemic has negatively affected employment and consequently, the finances of many, 30% of those surveyed expect things will improve. Only 10% think their situations will worsen and almost half don't expect any change or very little. Of those who have been affected financially, 40% expect their situation to improve.
Canadians are looking for larger homes. With many people working from home (WFH), size and location of homes has become increasingly important. The desire for home offices is one driving force. The other is the lack of outdoor spaces. Of those surveyed, 6% of non-owners want to move out of apartments and condos to homes that have larger outdoor spaces, as their outdoor spaces (i.e. balcony, garden) didn't support their mental health when quarantined. This is partly why city dwellers have been buying the suburbs, towns and farther afield. The expectation is that they will continue to be able to work remotely, or flexibly. According to MCP's report, homebuyers do not regret their investment.
Ontarians thinking about buying a home should consider the following:
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