Toronto, ON - Perceptions of the real estate market in Ontario remain strong heading in to the winter season as the OREA Home Ownership Index edges higher by 2 points to an all-time high, according to a new Ipsos poll conducted on behalf of the Ontario Real Estate Association.
Twice a year since 2013, Ipsos has released an Ontario Homeownership Index in partnership with the Ontario Real Estate Association (OREA), taking the pulse of Ontarians' perceptions of home ownership and real estate markets at the neighbourhood, city and provincial level. In the latest wave of tracking, the Index has inched higher by 2 points to 131, an all-time high since tracking began in the fall of 2013. Interestingly, this is the first time that the index has risen in the fall season, which is often viewed as a slower time for the real-estate market, and the index typically reflects this.
Driving the index higher are perceived improvements in the real estate markets within the last year. For example:
- One quarter (25%) of Ontarians say that the overall real estate market in Ontario is a lot stronger (8, 9 or 10 on a scale of 1-10) than it was a year ago, up 6 points since the spring.
- One in three (31%) Ontarians say that the overall real estate market in their city or town is a lot stronger than it was a year ago, up 5 points since the spring.
It's likely that perceptions of a strengthening market will continue in Ontario into the foreseeable future as the survey results suggest that activity in the market is likely to continue growing:
- Fourteen percent (14%) of Ontarians say that they're very likely (8, 9 or 10 on a scale of 1-10) to purchase a home in the next 2 years, up 3 points since a year ago.
- Fifteen percent (15%) Ontarians say they're very likely to sell a home within the next 2 years, up 4 points since a year ago.
Four in Ten (41%) Ontarians Think they'll be Impacted by new Stress Test Rules
Four in ten (41%) Ontarians believe that at some point the new federal government rules about mortgage stress testing will impact them. As of October 17th, 2016, the Federal Government of Canada requires prospective home buyers with less than 20% down-payment to pass a mortgage-rate "Stress Test" to ensure they will still be able to make their mortgage payments in the event mortgage rates go up in the future (about 2% above the current rates).
Thinking about how the new rules could impact them, two in ten (20%) Ontarians overall believe they'll need to keep saving for a 20% down payment before buying a home, while 16% say they'll postpone buying a home. Others believe they'll need to find additional money to increase their down payment (15%), look for a less expensive home than they one they wanted in the same city (15%), look for a less expensive home than the one they wanted in another city (9%) or that it will have some other impact (2%).
Other Ontarians maintain that it won't have an impact (32%), that they already have a 20% down payment (12%), that they won't be looking for a home (2%) or that they already own a home that is paid for (1%). Two in ten (19%) are unsure of the impact that these new rules could have on them.
The impact could be especially profound on prospective first-time home buyers, with 45% (compared to 20% of the general population) saying that they'll need to keep saving for a 20% down payment, 27% (compared to 15% of the general population) believing they'll need to find additional money to increase their down payment, and many saying they'll need to look for a less expensive home either in the same city (34% compared to 15% GenPop) or a different city (22% compared to 9% GenPop).
Home Hunting in Ontario
Among those who are at least somewhat likely to be buying a home in the next two years, the most popular type of home they'll be looking for is a detached home (49%), up 13 points since last fall. Interestingly, interest in condos (19%) has declined by 7 points year over year, while interest in semi-detached homes (19%) has ticked upwards (4 points). The least popular type of home among prospective buyers is row homes or townhomes (14%, down 2 points).
One quarter (25%, up 4 points since last year) of prospective homebuyers say they have a preference for a new build, while most prefer a resale, whether it be a turn-key (18%, -9), a resale with minor updates required (14%, -5), or a complete fixer-upper with major renovations required (5%, -2). Two percent (2%, -1) of Ontarians are looking to buy a property to tear it down and rebuild.
More Ontarians who express a preference are interested in the suburbs (18%, -8 points), compared to just 6% (-8) who would rather be in or near the city-centre, and 15% (-3) have a preference for a rural location.
These are some of the findings of an Ipsos poll conducted between October 27 and 31, 2016, on behalf of the Ontario Real Estate Association (OREA). For this survey, a sample of 1,003 Ontarians from Ipsos' online panel was interviewed online. Weighting was then employed to balance demographics to ensure that the 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 +/ - 3.5 percentage points, 19 times out of 20, had all Ontario adults 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.
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