Home purchase intent isn't just down amongst first-time homebuyers, but across Canada in general. Less than two in ten (15%) are `likely' (4% very/11% somewhat) to purchase a home, or another home, within the next two years. While those who are `very likely' to buy is down by half (4% in 2013 vs. 8% in 2012), the biggest decline is seen by those who are `somewhat likely' (11% in 2013 vs. 19% in 2012), likely indicating that those on the fence about purchasing a new home will likely hold off. Nine in ten (85%) Canadians are `not likely' to purchase a new home within the next two years, up 12 pts. from last year (73%).
Four in ten (40%) Canadians likely to purchase a home within the next two years will be first-time homebuyers, down 2 pts. from 2012 (42%). Six in ten (61%, up 3 pts. from 2012) Canadians planning to buy a home in the next two years will not be first-time home buyers.
While a majority (84%) of Canadians believe that a house or condominium is a `good' (31% very good/53% good) investment, this proportion is the lowest seen since 2009 (82%). Half (48%) of Canadians believe waiting until next year to buy a house makes more sense, up 7 pts. from last year and the highest this figure has been 2009 (52%), although a majority (52%, down 7 pts. from 2012) still believe it makes more sense to buy a house now.
Interestingly, although Canadians are more likely to wait until next year to buy they are also less likely to believe that housing prices will be higher next year (43%, down 4 pts. from 2012) than this year, while one in four (24%, up 1 pt.) believe they'll be lower, and one in three (33%) believe they'll stay the same as they are today. For the first time in four years, more Canadians believe the current housing market is `balanced' (40%, up 4 pts.) rather than being a `buyer's' (35%, down 3 pts.) or `seller's' (25%, down 2 pts.) market.
Other Factors for Sidelining Potential Buyers
Prices aren't the only reason Canadians aren't jumping into the housing market with both feet. Three in four (75%) believe that recent government changes will impact or delay people getting into the market. Four in ten recent and prospective homebuyers indicate that government-led mortgage controls such as the requirement of a minimum down payment of 5 per cent for a principal residence (38%), the maximum amortization shortened from 30 to 25 years (38%), or the requirement that they meet the standards for a five-year fixed rate term even if they plan to choose a mortgage with a shorter term and interest rate (36%) will impact them. One in three (33%) believe the availability of government-backed insured mortgages will impact them.
Nearly half (49%, up 3 pts.) of Canadians expect mortgage rates will be the same at this time next year, while only one in ten (9%, down 4 pts.) believe mortgage rates will be lower, the lowest this figure has been since 2006, and four in ten (43%) believe mortgage rates will be higher at this time next year.
Half (47%) of first-time homebuyers in the market cite affordability (46%, down 1 pt.) as the top reason for not purchasing a house before now, followed by these potential homebuyers saving money for a large down payment (32%, up 14 pts.) and being unsure about their job security (28%, up 8 pts.). The following table outlines in full the reason why potential first-time homebuyers have waited until now to become homeowners:
Banks as Best Advisors
Given mixed sentiment in the Canadian housing market, the majority of Canadian homebuyers seek qualified advice from a variety of sources in their home purchases. Three in four (76%) use their banker for mortgage advice, while one in four use family (27%) or a real estate agent (23%) and two in ten (20%) use friends for advice. One in ten use either real estate websites (11%), mobile applications (11%), private sale websites (8%), or social media sites (7%) for their mortgage advice.
Canadian homebuyers are also most likely to use bank resources as a primary source of information or advice regarding the financial aspects of funding the purchase of their home. Four in ten (40%) Canadian homebuyers use banks/bankers (27%, no change) or bank websites and calculators (13%, up 4 pts.) as their primary source of information on financing a home purchase. Two in ten use mortgage brokers (17%, -3 pts.), real estate agents (17%, - 2pts.), or family (15%, +1 pt.), while less than one in ten use friends (5%, +1 pt.), social media sites (1%, no change), or some other source (7%, up 1 pt.).
British Columbia: British Columbians are evenly divided on whether it makes sense to buy a house now (51%) or wait until next year (49%). One in five (20%) British Columbians say they are likely to purchase a home within the next two years as residents in this province are more likely than any other Canadian region to forecast lower housing prices in the next year (38% versus 24% national average).
Alberta: Nine in ten Albertans (89%) indicate buying a house or condo is a good investment, higher than the national average (84%), even as home buying intentions have dropped from a year ago to 22%, compared with 31% in 2012. Half (49%) of Albertans feel their current housing market is balanced, nine point higher in comparison to the national average (40%).
Prairies: Majority (56%) of residents in Manitoba and Saskatchewan believe it makes more sense to wait until next year to buy a home, in contrast to a majority (52%), nationally, that believe it makes sense to buy a home now given current housing and economic conditions. Having said this, residents of the Prairies (88%) are more likely than the national average to believe that buying a house or a condominium is a good investment.
Ontario: While a majority (86%) of Ontarians do not expect to buy a home in the next two years, almost as many (83%) feel that buying a house or condominium is a good investment, just 1 pt. below the national average. Given current housing prices and economic conditions, majority (52%) of Ontarians say it makes more sense to buy now, while a minority (48%) prefer to wait until next year, both on par with the national average.
Quebec: Majority (87%) of Quebecers do not expect to buy a home in the next two years, but they also believe that a home or condo is a good investment (84%). Given current housing prices, Quebecers are split between believing that it makes more sense to buy a house now (49%) compared to those who will be waiting until next year (52%).
Atlantic Canada: Given current housing prices and economic conditions, Atlantic Canadians are most likely to indicate that it makes sense to buy a home now (64%, +12 pts. versus the national avg.), rather than wait until next year (36%). Confidence in the investment value of a house or condominium remains high in Atlantic Canada (81%) but just below the overall Canadian sentiment (84%).
These are some of the findings of an Ipsos Reid poll conducted between January 31st to February 8th, 2013, on behalf of RBC. For this survey, a sample of 3,005 Canadian adults from Ipsos' Canadian online panel was interviewed online, including an oversample to 505 pre-first time homebuyers, 203 first time homebuyers, and 277 next time homebuyers. Weighting was then employed to balance demographics to ensure that the main sample's composition reflects that of the adult population according to Census data and to provide results intended to approximate the sample universe. The precision of Ipsos online polls is measured using a credibility interval. In this case, the poll is accurate to within +/- 2 percentage points had all Canadians adults been polled, within +/- 5 percentage points of all pre-first time homebuyers, +/- 7.8 percentage points of all first time homebuyers, and +/- 6.7 percentage points of all next time homebuyers. All sample surveys and polls may be subject to other sources of error, including, but not limited to coverage error, and measurement error.
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Associate Vice President
Ipsos Reid Public Affairs
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