There have been rumblings among realtors that the rising cost of owning a home and increasing mortgage rates could lead to panic selling among a number of homeowners, and a recent survey is shedding light on Canadians’ intentions to sell their properties.
More than 20 per cent of homeowners plan to sell their primary residences within the next three years, according to a survey conducted by Nerdwallet and The Harris Poll, which involved 1,099 Canadian adults, including 749 homeowners.
While that could result in a historic increase in listings, only 22 per cent of those planning to sell their primary residences cite saving money as a primary motivator, and 7.0 per cent mention an inability to afford their mortgages as a reason. Instead, the most common motivation to sell is a desire to downsize, with 34 per cent of respondents listing it as their primary reason.
5.4 million new listings?
So, how likely is this scenario? With one in five homeowners expressing their intentions to sell their primary residences within the next three years, it could potentially translate into 5.4 million new listings — an average of 1.8 million annually — by 2026. The team at Nerdwallet notes that in the past decade, the highest number of new listings Canada witnessed was just over one million homes in 2015.
Moreover, the personal finance company speculates plans to sell other property types also seem somewhat inflated, with 9.0 per cent of Canadians indicating they intend to sell a vacation home in the next three years and 12 per cent planning to sell investment properties within the same period.
These numbers substantially exceed recent averages.
Homeowners don’t appear to be in a hurry to sell either, as only 6.0 per cent plan to do so within the next 12 months, with 4.0 per cent and 5.0 per cent targeting sales between 13 and 18 months and 19 and 24 months from now, respectively. A significant majority (41 per cent) are looking at a timeline exceeding five years, hinting at a cautious approach to their selling plans.
Market uncertainty fuels concerns among potential sellers
Homeowners with plans to sell within the next three years share a common set of worries, including the stress of moving (41 per cent), concerns about higher mortgage rates impacting buyers’ budgets (37 per cent), and apprehensions about selling their homes for less than they believe they’re worth (27 per cent).
The uncertainties of navigating a competitive market also weigh heavily on their minds, with 26 per cent expressing concerns about limited housing supply and high mortgage rates when they enter the market.
Find more from the survey and details on Nerdwallet’s methodology here.
