A couple of recent surveys show that the pandemic is strengthening the resolve of Canadians to become homeowners.
A report released by Zolo, an online real estate marketplace, shows that despite global economic troubles and ongoing uncertainty, the majority of Canadians are still pursuing homeownership. It says 77 per cent of Canadians are willing to push back saving for retirement if it means they will be able to buy a home sooner.
Pre-pandemic, 74 per cent of Canadians were saving for a down payment on a home; post-pandemic, the number still saving decreased only slightly to 71 per cent, says the report. When asked if COVID-19 changed their opinion about becoming a homeowner, 25 per cent of Canadians agreed with the statement, “I want to be a homeowner now more than ever.”
“Buying a home isn’t always about building wealth or gaining another asset,” says Alyssa Davies at Zolo. “This pandemic has made people realize how much they value stability and a safe space to call their own.”
The 6,651 respondents that participated in the online survey says the top four motives to buy a home are:
- To live in a stable and safe environment (23 per cent);
- The freedom to customize their home (22 per cent);
- To start a family (22 per cent);
- More permanence in the neighbourhood they love (15 per cent).
“On a personal level, I can relate to the psychological desire to buy a home,” says Davies. “After running the numbers before I bought, it was consistently cheaper to rent, but that didn’t provide enough permanence for my family.”
Another report from Mortgage Professionals Canada (MPC) suggests that consumers’ attitudes on homeownership during the pandemic have changed little since MPC first polled Canadians three months ago. The third installment of Rapidly Evolving Expectations in the Housing Industry by MPC’s chief economist Will Dunning found that despite the survey occurring during a partial renewal of COVID-19-related economic shutdowns and an increase in positive COVID tests, “there has not been a discernible negative impact on perceptions about current employment situations or in attitudes towards home ownership.”
The analysis says the pandemic has had powerful negative and positive effects for home buying. There is acknowledgement of Canadians who “have experienced deteriorations in their personal economic circumstances or are worried about their futures, which has affected their attitudes about the housing market and their ability or willingness to buy.” However, Dunning also notes that, “for many Canadians, the pandemic has raised interest in making housing changes,” including finding housing “that is more suitable in a work-at-home/spend-more-time-at-home world.”
The Bank of Canada’s announcement in August that interest rates would remain low for a long time has “also made homeownership more accessible for first-time buyers and altered the calculations for potential move-up buyers,” says Dunning. Additionally, “For people in reasonably stable economic situations who expect that stability to continue, there is currently heightened interest in home buying.”
Infographic by Zolo
Consumers are more optimistic about the future of home ownership. In each of MPC’s 2020 surveys to date, the percentage of non-owners who expect to buy a home in the coming year has increased, and is sharply higher, from seven per cent just prior to the pandemic to 19 per cent in the most recent report. Conversely, there has been a significant drop in the number of individuals who expected to never be able to purchase a home: 32 per cent of consumers at year-end 2019 to just 16 per cent now. The report discusses that not all of the people who expect to buy a home will be able to.
In the third MPC report, homeowners remain overwhelmingly happy with the decision they made to purchase their home – 90 per cent. Only two to three per cent indicated regret in their home buying decision. Seven to eight per cent of homeowners wish that they had purchased a different property.
When it comes to perceived expected difficulty in making mortgage payments, 23 per cent of those surveyed expect “some difficulty” making their payments as a result of COVID-19, and four per cent expect “a lot of difficulty”. These figures are also little changed from MPC’s two previous COVID-19 consumer sentiment reports.
Taylor says there is some uncertainty regarding the future impact of the ending of mortgage deferrals. “There are likely some homeowners who are currently determining whether they are able to continue to manage their mortgage debt obligation or be forced to sell. We expect to begin to see the impacts of this on the market and in consumers’ sentiments in our next report.”
